In this special (Cloud Wars and Cloud Wars Horizon) video, Bob Evans and Tom Smith weigh in on quarterly earnings highlights (and lowlights) from their respective areas of analysis.
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Highlights
01:05 — Salesforce stood out among the Cloud Wars Top 10 for its reduced growth rate. Bob notes that Salesforce has often touted being the only company in the history of American business with something like 73 or 74 continuous quarters of increasing growth; it has been a remarkable history. But now, that’s the standard that the company is measured by, and last quarter its growth rate dropped from the usual low to mid-twenties to 14%, which is admirable growth by most standards but not for Cloud Wars companies.
01:51 — For some of Salesforce’s core/franchise products, the growth rates were down around 11% to 12%. In Tableau, the data business, it was 8%, plus you had high-profile executive departures. It appears to be a company in disarray, which would have been very difficult to predict, and now we’ll need to see what Marc Benioff does to turn things around.
02:30 — On the more positive side, Workday had 22% growth in subscription revenue and it says that’s because what the company does is mission-critical. Companies have to be able to take care of their people with HCM. It is in the business now of helping companies run; they’re indispensable parts of their operations. Also, Snowflake, had 67% growth, and a couple of people pointed out that’s down from 84% last quarter, and that’s true, but it’s strange when you have to apologize for 67% growth.
03:50 — Tom raises HPE, which also had a fantastic quarter, and the Green Lake hybrid cloud platform helped drive those stellar results. The company emphasized how the hybrid cloud is resonating with customers and that’s a big trend to watch in 2023.
04:27 — MongoDB, the cloud database software developer blew away forecasts for revenue and adjusted earnings, and raised full-year guidance. The company emphasized its ability to consolidate a wide range of use cases and workloads in a single platform. That means simplicity. It means a unified architecture for customers.
05:22 — Bob notes that so-called “legacy companies” like HPE and IBM understand how big businesses have run in the past. They have that expertise. They know how they function and now they’re able to bridge that over to the Cloud as well, so it’s interesting to see these mature
companies be able to jump into the modern world and take along with them the power of that incumbency.
06:40 — Bob refers to naming Safra Catz Cloud Wars CEO of the Year. Critics say Oracle as a company is too old, and the database is as well. It’s utter nonsense. People thought Oracle leaders were nuts when they took on Google Cloud and Microsoft in the cloud infrastructure business — “these companies are impregnable.” But Oracle has taken share. It remains much smaller, but it’s the fastest growing at close to 60% and should be considered the fourth hyperscaler.
07:42 — Oracle has that level of growth and achievement, plus Safra Catz is now running sales in addition to her traditional roles leading finance, operations, and HR. Oracle has really blossomed and that made her a perfect choice for CEO of the year.
09:10 — It’s another case where the big winners in the Cloud Wars are the customers — there’s fantastic competition with Oracle winning billion-dollar deals.
10:10 — Tom raises Dell, which beat the forecast for revenue and blew away earnings expectations. Its earnings beat (70 cents) was half driven by supply chain efficiencies and the improving supply chain outlook. Tom says that could be a good sign for supply chains more broadly.
11:50 — Tom notes Dell’s big sustainability focus with a concept PC called Luna that has snap-together parts; a great example of innovation around sustainability.
For more exclusive coverage of innovative cloud companies, check out Cloud Wars Horizon here:
