While dollar appreciation rattled Q2 revenue totals and growth rates, the Cloud Wars Top 10 continued to show remarkable momentum, with cloud revenue for Google up 36%, SAP up 34%, Amazon 33% and Microsoft 28%.
Before you are tempted to wonder if Microsoft 4th Place finish for Q2 means he loses his advantage, please keep two things in mind:
So let’s take a look at each of these four companies, plus a fifth that could top the whole bunch when it releases its latest numbers in about five weeks.
With revenue up 36% to $6.3 billion, Google Cloud continues its 18-month streak as the world’s hottest cloud provider. While 36% is a tremendous achievement for a company the size of Google Cloud — it will end the year with around $27 billion in revenue — that number is down from the mid-1940s growth numbers that Google Cloud has released in each of the last six quarters. An important factor in Q2 was, of course, foreign currency exchange rates which strengthened the dollar and led to lower total revenues for all major cloud providers. Well, all except…
Because it is headquartered in Germany and not the US, Sève has actually benefited from currency capers and the 34% cloud growth figure it achieved in Q2 may not be sustainable if the dollar s was weakening. At the same time, SAP delivered exceptional growth and a current backlog for its S/4HANA Cloud ERP applications (Q2 revenue growth of 84%, or 72% at constant currency; and current cloud orders by 100%, or 87% at constant currency).
SAP also said its enterprise technology platform was showing a 40% growth rate on revenue of around $380 million. Additionally, SAP’s Concur expense management business grew 20% for the quarter as it continues to return after being devastated by pandemic travel restrictions.
Only in Cloud Wars Could an Iconic Brand Like AWS Post 33% Revenue Growth to Nearly $20 Billion and Still Finish in Third Place Among Growth Players the fastest. AWS generated $19.7 billion in revenue in the second quarter and ranks second in cloud revenue volume behind Microsoft.
But as we noted yesterday, AWS has grown much faster than Microsoft for over a year, and I don’t think it’s a stretch that Nadella’s fixation on “taking shares” during his remarks on Microsoft’s July 26 earnings call was a very direct and blunt reaction to this momentum from AWS. Again, you can read all about it in Microsoft is launching a market share war and customers are sure to win as Nadella and CFO Amy Hood look to get their company back on the offensive.
Speaking of offending, last year I predicted that Microsoft would surpass $100 billion in cloud revenue in 2022, and the company’s ability to hit $25 billion in the second calendar quarter — despite challenges in Foreign Currencies – testifies to the enormous market power of the Cloud Wars Top 10 company over the past 3 ½ years.
Nadella’s language on the earnings call was more direct than usual. While Microsoft will look to regain the initiative, we can be 100% sure that AWS and Google Cloud will surely do the same. This means that business buyers can expect to receive fantastic offers from each of these companies and their partners in the biggest growth market the world has ever seen.
I mentioned that I would be talking about a fifth company, and that would be Larry Ellison and his crew at Oracle. In mid-June, when Oracle released its fiscal 4th quarter and full year results, CEO Safra Catz presented a stunning outlook for the company’s fiscal first quarter, which ends in less than a month. month on August 31. Catz said that for the fiscal year that began June 1, the company’s cloud organic growth would be 30%, which in itself is pretty impressive. But Catz then added that for fiscal Q1 ending August 31, Oracle’s cloud revenue growth rate including Cernerdes financial results of would be between 44% and 47%.
If Oracle is able to achieve the guidance numbers offered by Catz, then Oracle would become by far the fastest growing leading cloud provider in the world.
Is it a wild market or what?