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'Big 3' Public Cloud Providers Start 2021 Strong

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The first quarter of 2021 was another period of high growth for the big three public cloud providers as Amazon, Microsoft and Google all reported strong gains.


On April 27, Microsoft reported that its cloud activities generated $17.7 billion in commercial cloud revenue in the first quarter, for a 33% year-over-year gain. On the same day, Google reported $4 billion in cloud operations revenue, up by 46% from the first quarter of 2020. Amazon continues to outpace its rival public cloud providers, on April 29 reporting $13.5 billion in revenue for the quarter—a 32% year-over-year gain for its cloud business.


According to a market sizing analysis by Synergy Research Group, Microsoft and Amazon account for more than half of all global cloud revenue.


“Amazon and Microsoft have earned their leadership positions as they focus aggressively on growing their cloud services, quarter after quarter, year after year,” said John Dinsdale, a chief analyst at Synergy Research Group, in a statement. “They continue to invest billions of dollars every quarter in expanding their global data center footprint, while at the same time enhancing their cloud service portfolios.”


Google Sees Three Drivers for Cloud Growth


During his company’s earnings call, Google and Alphabet CEO Sundar Pichai identified three distinct market trends for cloud growth.


The first key driver for Google is momentum in what is known as the data cloud—that is, cloud services for data management and analytics.


“Our expertise in real-time data and analytics is winning companies like Twitter and Ingersoll Rand, who are moving their complex data workloads to Google Cloud,” Pichai said.


The second key driver is the continued movement toward infrastructure as a service (IaaS). Pichai said Google is winning large IT transformation deals with companies that are migrating their data centers to Google Cloud.


Third is software as a service (SaaS), specifically the Google Workspace suite of productivity tools that Pichai said is continuing to grow.


Microsoft Taking a Vertical Approach to Cloud Growth


Having both hybrid cloud and industry-specific vertical cloud offerings are key to success and growth, Microsoft CEO Satya Nadella noted during his company’s earnings call.


Nadella highlighted the Azure Arc offering, which enables users to have a Microsoft cloud control plane across on-premises, multicloud and edge deployments.


In discussing the importance of having industry-specific customizations for cloud services, he said, “This quarter, we introduced new industry clouds for financial services, manufacturing and nonprofits, building on the momentum of existing clouds for health care and retail.”


AWS Seeing Growth Due to Pandemic


During Amazon’s earnings call, Chief Financial Officer Brian Olsavsky said the first quarter saw Amazon Web Services (AWS) revenue growth accelerate across a broad range of customers.


“During COVID-19, we’ve seen many enterprises decide that they no longer want to manage their own technology infrastructure,” Olsavsky said. “They see that partnering with AWS and moving to the cloud gives them better cost, better capability and better speed of innovation, and we expect this trend to continue as we move into the post-pandemic recovery.”

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