Underscoring the foolishness of referring to Oracle, Microsoft, and SAP as “legacy” vendors, all three now generate more than 50% of their revenue from the cloud, a trend that will certainly accelerate with the AI Revolution.
In fact, the “legacy” label that some could-native vendors have tried to hang on those three as a pejorative descriptor can now be regarded as a powerful and positive attribute as enterprises look to harmonize all of their data and systems to meet the soaring demands of the nascent AI Economy.
There’s a big lesson in there for all of us because the extraordinary changes being triggered by AI and cloud technology across the business world are forcing us to question traditional norms and “conventional wisdom” and long-established “best practices” in the face of dramatically different customer expectations and the use of technology for innovation and growth.
Are these numbers signs of healthy evolutions across each of these 50-something companies, or should these companies be mocked because not all of their revenue comes from the cloud?
| Company | Latest Qtr Rev. | Cloud Rev. | % Cloud | Cloud Wars Top 10 Spot |
|---|---|---|---|---|
| Oracle | $16.1B | $8.0B | 50% | #2 |
| Microsoft | $81.3B | $51.5B | 58% | #3 |
| SAP | $11.43B | $6.62B | 58% | #4 |
Growth rates would indicate that the market has spoken loudly and clearly as all of those three old-timers are growing much faster than most of their cloud-native competitors (details in latest Cloud Wars Growth Chart below). In addition, each of the three is at the forefront of the huge changes in technology, go-to-market approaches, and partnerships that have combined to radically alter the enterprise-tech landscape in the last two years.
Final Thought
Lazy assumptions — such as “legacy” vendors can’t compete, but all cloud-native companies are cool — lead to bad decisions that inevitably trigger suboptimal outcomes. Consider this revealing comment from Microsoft CEO Satya Nadella at the top of the press release for Microsoft’s fiscal-Q2 results for the quarter ended Dec. 31:
“We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises. We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.”
And lest we forget, in that same quarter “legacy vendor” Microsoft posted cloud revenue of $51.5 billion.
That’s some legacy, isn’t it?
Ask Cloud Wars AI Agent about this analysis
