Google Cloud’s stunning 48% Q4 growth proves that it has become the cloud and AI vendor of choice for enteprise customers as Google Cloud generated $2.5 billion in incremental quarter-to-quarter revenue, topping the comparable figure of $2.4 billion for Microsoft Cloud.
This is a monumental achievement for Google Cloud for a number of reasons:
1. Winning the future: While Microsoft Cloud is unquestionably the world’s largest cloud and AI vendor with revenue almost 3X as large as Google Cloud ($51.5 billion to $17.7 billion), its ability to win more incremental quarter-to-quarter business than Microsoft Cloud shows that while Microsoft Cloud has dominated the past, Google Cloud is winning more of the future business.
2. Size matters — but it’s not the only thing that matters: It’s essential to bear in mind that this forward-looking victory for Google Cloud comes in spite of the fact that Microsoft Cloud’s total revenue is 3X larger than that of Google Cloud.
3. Momentum is a powerful thing: For more proof of who is the hotter player, look at these comparative growth rates for the two companies over the past five quarters — and think about what it took to make that remarkable leap from Q3’s 34% to Q4’s 48%:
| Company | Q4 | Q3 | Q2 | Q1 | Q4 ’24 |
|---|---|---|---|---|---|
| Google Cloud | 48% | 34% | 32% | 28% | 30% |
| Microsoft | 26% | 26% | 27% | 20% | 21% |
**Microsoft’s fiscal year begins July 1 and ends June 30**
4. Massive cloud/AI synergy: Google Cloud’s blitz of Gemini innovations — from Gemini Enterprise to Gemini 3 to Gemini for Government — plus its full stack from TPUs and GPUs to Vertex AI to Applied AI agentic applications have given it a superb pairing of world-class AI plus cloud capabilities.
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5. Security must be a priority, not an afterthought: While Google Cloud made cybersecurity a centerpiece of its business since the arrival of CEO Thomas Kurian in 2019, Microsoft allowed its security capabilities, mindset, and technologies to become so feeble that CEO Satya Nadella and security chief Charlie Bell were compelled 18 months ago to scrap it all and rebuild its entire security apparatus from top to bottom. And if you don’t think that mattered to customer-side CEOs betting their businesses on their careers on their choice of cloud/AI vendor, you’re deluding yourself.
Final Thought
A month ago, I elevated Google Cloud to the #1 spot on the Cloud Wars Top 10 and downgraded Microsoft from the #1 spot to #3, while also moving Oracle into the #2 spot from #3. The point was that the Cloud Wars of the past are not nearly so relevant as the Cloud Wars of the AI Economy of the future, and that in spite of Microsoft’s world-leading mass, it has failed to continue to innovate and lead at the pace and scale demanded by business leaders across industries and across the globe.
Meanwhile, Google Cloud has done the exact opposite, fulfilling Kurian’s promise from seven years ago to build for what customers will need in the future while also meeting their needs of today.
And the ultimate proof of that is starkly clear in two numbers that powerfully reflect the fickle dynamics of customer demand: by growing its Q4 revenue 48% and generating $2.5 billion in incremental Q4 revenue versus Microsoft’s $2.4 billion, Google Cloud has demonstrated that it richly deserves to be the #1 player in the greatest growth market the world has ever known.
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