Summary List Placement
Microsoft, Google, and Amazon all reported blockbuster earnings this week and its largely thanks to strong cloud growth.
The pandemic put tech modernization front and center, forcing companies to prioritize moving to the cloud — and analysts think that the momentum of that digital transformation is unstoppable. The events of the last year only enhanced the appeal of the cloud, making it more clear to companies than ever that investing now can pay dividends later, whether or not there’s a pandemic putting pressure on their businesses.
Importantly, too, this dynamic only serves to entrench the power of Amazon Web Services, Microsoft Azure, and Google Cloud — as well as other cloud heavyweights like Zoom or Salesforce, both of which themselves run at least partially on Amazon’s cloud — as the very few who can offer the right amount of computing power at the right price to meet the needs of the moment.
“The growth from the likes of the Big Three — Microsoft, AWS, and Google — was jaw dropping,” Wedbush Securities managing director Dan Ives told Insider. “I think this earnings season put a major exclamation mark on the type of growth that cloud computing is seeing.”
And he believes there’s no going back: “It’s a misnomer that with work from home tailing off, and on the other side a pandemic, cloud computing is going to fall off a cliff. I think it’s the exact opposite.”
The question becomes less about whether or not the cloud continues to grow and more about how providers like Amazon, Microsoft, and Google keep up the pace. Ives and other analysts will be watching trends like hybrid cloud, which combines cloud platforms with private data centers and servers, and industry-specific offerings, where companies sell specific tools for the healthcare or telecom. 2021 will be “the year of the vertical cloud,” analyst Maribel Lopez told Insider, because “all the base foundation stuff is done.”
Amazon is the leading cloud, but Google and Microsoft showed strong growth
Amazon is still the frontrunner in terms of cloud market share, but each of the Big Three posted strong numbers when they reported earnings earlier this week:
Google Cloud reported $4 billion in revenue for the first quarter on Wednesday, up 46% from the same period prior. Microsoft said that Azure grew 50% year-over-over, although it does not break out revenue numbers (it’s included in its intelligent cloud segment, which includes a wide range of products and generated $15.1 billion in revenue, up 23% from this time the year before). Amazon reported that its cloud unit AWS generated $13.5 billion this past quarter, up 32% from a year prior.
Notably, both Google and Microsoft’s clouds grew at similar rates, but Microsoft operates on a larger scale, showing that “Microsoft’s growth at scale is second to none,” Wolfe Research analyst Alex Zukin wrote in a note.
Google shares climbed as much as 5%, Amazon’s stock saw an uptick of nearly 2%, and Microsoft’s stock actually slipped 3.5% …read more
Source:: Businessinsider – Tech
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