With its Q1 growth rate accelerating to 28%, Google Cloud is once again the fastest-growing company in the Cloud Wars Top 10, with second-place Oracle and ServiceNow each expanding their cloud revenue by 25% in their most recent periods.
Several times throughout the year, I update this Cloud Wars Growth Chart to reflect the trends in customer demand for cloud plus AI technologies and services. The updates allow me to incorporate the various fiscal-year calendars followed by the Cloud Wars Top 10 companies, with six following the calendar year, three having fiscal years ending Jan. 31, and one ending May 31.
The Cloud Wars Growth Charts enable you to get a relative sense of customer demand for each company’s cloud plus AI services and solutions along with the revenue volumes each company has generated in its most recent quarter. And, as you can see in the full chart below, those revenue figures vary widely, which is certainly a key factor if evaluating the relative growth rates as it’s much harder to grow at high rates off a large revenue base than off a small one.
That qualifier aside, let’s take a look at how rapidly — or tepidly — each of the Cloud Wars Top 10 companies grew in its most recent quarter.
Cloud Wars Growth Chart: May 13, 2024
| Company | Growth Rate | Cloud Revenue | Quarter End |
|---|---|---|---|
| Google Cloud | 28% | $9.6 billion | 3/31 |
| Oracle | 25% | $5.1 billion | 2/29 |
| ServiceNow | 25% | $2.52 billion | 3/31 |
| SAP | 24% | $4.3 billion | 3/31 |
| Microsoft | 23% | $35.1 billion | 3/31 |
| Workday | 18% | $1.8 billion | 1/31 |
| AWS | 17% | $25.1 billion | 3/31 |
| Salesforce | 11% | $9.3 billion | 1/31 |
| IBM (Red Hat) | 9% | ? | 3/31 |
| Snowflake | 33% | $738 million | 1/31 |
Based on those numbers, here are some observations on how I feel each company is doing here in the greatest growth market the world has ever known:
Google Cloud 28%: I was very impressed to see Google Cloud boost its Q1 growth rate to 28% after delivering 25% in Q4. Also, the CEO of parent company Alphabet surely has big things in mind for the rest of the year with Google Cloud as you can see in my recent analysis headlined Google Cloud Will Soar to $50 Billion Run Rate in Q4, Alphabet CEO Pichai Hints.
Oracle 25%: CEO Safra Catz and chairman Larry Ellison both said that customer demand for Oracle Cloud Infrastructure is far outstripping capacity and that the company’s racing to build out hundreds of data centers around the world. The incentive is huge: customer demand is surging as Oracle RPO Jumps 29% to $80 Billion, but Capacity Constraints Persist.
Service Now 25%: Having achieved in Q1 a $10-billion run rate in the cloud, CEO Bill McDermott is looking to make AI an additional force-multiplier for future levels of high growth, rechristening his company’s position as “the AI platform for business transformation.”
SAP 24%: On top of its 24% overall cloud growth rate for Q1, SAP said revenue for its newly bundled Cloud ERP Suite grew 32% in the quarter, which the company said marked 9 straight quarters of 30% or more for the enterprise apps bundled into that suite. And the future’s looking bright as well: SAP Rocks Q1 as Revenue Grows 24%, Backlog 27%; Bullish on Full Year.
Microsoft 23%: No question that Microsoft’s Q1 numbers were terrific as the company grew a whopping 23% off a massive base to generate revenue of a staggering $35.1 billion. At the same time, Microsoft has just begun to address very serious problems across its security business that could cause some customers to take their business elsewhere: Can Satya Nadella Repair Microsoft’s Badly Broken Security Culture?
Workday 18%: At a recent event for analysts, Workday rolled out a truly impressive list of AI-powered applications, solutions, and tools that will help it continue to compete very effectively against much larger competitors. CEO Carl Eschenbach says Workday’s unified data model and advanced technologies are convincing more customers to go all-in with Workday Financials and HCM.
AWS 17%: This is one of the top stories from the recent earnings season: after 11 straight quarters of decling growth rates, AWS has now racked up two consecutive quarters of accelerating growth! Plus it topped $25 billion in quarterly revenue for the first time–and you can read all about this big turnaround at AWS Q1 Surge: Jassy Sees “Tremendous Opportunities”, AI Hits Multibillion-Dollar Run Rate.
Salesforce 11%: Marc Benioff’s decision to focus on profits rather than growth has done wonders for Salesforce’s market cap but it also pushing his company’s growth rate perilously close to single digits. It’s wonderful that shareholders are happy–after all, they’re the owners of the company–but does Salesforce really want to see its market share continue to dwindle and its position in the minds of business leaders diminish at this time of enormous opportunity?
IBM 9%: IBM no longer breaks out its cloud revenue and the closest proxy I can work with is its Red Hat hybrid-cloud platform. In Q1, IBM said Red Hat revenue grew 9%–and while that’s not exactly a blow-your-hair-back number, it’s better than last quarter. IBM does not disclose Red Hat revenue.
**Snowflake 33%**: As I’ve noted in previous Cloud Wars Growth Chart updates, I am isolating Snowflake at the bottom of these lists because it is so much smaller than the other Top 10 companies. When it’s quarterly revenue reaches $1 billion, I’ll rank it appropriately with the others. Meanwhile, new CEO Sridhar Ramaswamy will make his quarterly earnings-call debut later this month and will face the difficult task of following the legendary Frank Slootman as the face and voice of this high-flying Data Cloud innovator.
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