Will COVID-19 Tank Cloud Revenue for Microsoft, Amazon, Google, IBM?

How hard will the COVID-19 crisis hit the cloud growth rates of six Cloud Wars Top 10 vendors with Q1 earnings coming out soon: #1 Microsoft, #2 Amazon, #4 Google, #5 SAP, #7 IBM, and #9 ServiceNow?

We got a sense of the slowdown’s severity last week when SAP released its preliminary Q1 numbers. Those results showed that while cloud revenue grew a very respectable 29%, license revenue fell 31%. SAP said business was very solid in January and February, but that many customers pulled back in March as the world began to understand the magnitude of the COVID-19 pandemic. SAP will release final Q1 numbers of April 21.

So let’s take a look at the other 5 vendors in the Cloud Wars Top 10 and try to get an idea of what their Q1 numbers might look like. In each case, I’ll give three numbers: quarterly cloud revenue from the same period a year ago, quarterly cloud revenue from the previous quarter, and my projected cloud revenue for the 3 months ended March 31.

#1 Microsoft (earnings date April 29)

(Microsoft’s fiscal year ends June 30 so this most-recent 3 months was its fiscal Q3.)

• Year-ago quarter cloud revenue and growth rate: $9.6 billion, up 43%
• Previous quarter cloud revenue and growth rate: $12.5 billion, up 41%
• My projection for their fiscal Q3 2020 cloud revenue and growth rate: $12.7 billion, up 32%

#2 Amazon (earnings date April 30)

• Q1 2019 cloud revenue and growth rate for AWS: $7.7 billion, up 42%
• Q4 2019 cloud revenue and growth rate for AWS: $9.95 billion, up 34%
• My projection for Q1 2020 cloud revenue and growth rate for AWS: $9.93 billion, up 29%

#4 Google (earnings date April 28)

• Q1 2019 cloud revenue and growth rate for Google Cloud: not released, but my estimate is $1.85 billion
• Q4 2019 cloud revenue and growth rate for Google Cloud: $2.61 billion, up 53%
• My projection for Q1 2020 cloud revenue and growth rate for GoogleCloud: $2.55 billion, up 38%, based on my estimate of Q1 2019 revenue of $1.85 billion

#7 IBM (earnings date April 20)

• Q1 2019 cloud revenue and growth rate: $4.4 billion
• Q4 2019 cloud revenue and growth rate, including Red Hat: $6.8 billion, up 23%
• My projection for Q1 2020 cloud  revenue, including Red Hat: $6.1 billion

#9 ServiceNow (earnings date April 29)

• Q1 2019 subscription revenue and growth rate: $760 million, up 40%
• Q4 2019 subscription revenue and growth rate: $899 million, up 36%
• My projection for Q1 2020 subscription revenue and growth rate: $988 million, up 30%

As the actual numbers come out over the next couple of weeks, we’ll keep you up to date on all the details and related analysis. Until then, stay safe and healthy.

Subscribe to the Cloud Wars Newsletter for in-depth analysis of the major cloud vendors from the perspective of business customers. It’s free, it’s exclusive, and it’s great!