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'Big 3' Public Cloud Providers Showing No Signs of Slowdown

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Apparently there’s no ceiling for growth in the cloud as the big three public cloud providers all reported big financial gains last week.


Earnings week for the big three public cloud providers—Amazon Web Services (AWS), Microsoft and Google—got started on July 27, with Google’s parent company Alphabet reporting Google Cloud revenue of $4.6 billion for the second quarter of 2021, up 54% year over year. Also on July 27, Microsoft reported its fiscal fourth-quarter 2021 results, with its intelligent cloud services revenue coming in at $17.4 billion for a 30% improvement. Finally, on July 29, Amazon reported its fiscal second-quarter 2021 financial results, with net sales of $14.8 billion from its AWS cloud unit, a 37% year-over-year gain.


What’s Driving Cloud Growth


During Alphabet’s earning’s call, CEO Sundar Pichai cited a number of key trends that were contributing to the continued acceleration of cloud revenue growth. One key trend is the increase in cyberattacks—in particular ransomware—which is making the security capabilities of Google Cloud an attractive option for organizations.


Pichai said continued demand for data and analytics services in the cloud is also a driver of adoption. Finally, Google’s software-as-a-service (SaaS) applications with the Google Workspace offering is continuing to attract news users, especially as organizations continue to support remote workers.


Microsoft’s Cloud Transformation Efforts Continue


Microsoft CEO Satya Nadella used his company’s earnings call to focus on cloud opportunities.


“Moving forward, every organization will need more ubiquitous and decentralized computing,” Nadella said. “Over the past year, we have added new data center regions in 15 countries across five continents, delivering faster access to cloud services and addressing data residency requirements.”


Leadership Change at AWS as New Growth Is Planned


AWS now has new leadership, with former Tableau CEO Adam Selipsky taking over the role of CEO at AWS on May 17 for Andy Jassy, who is now the CEO of Amazon. Selipsky had worked for Amazon for 11 years, most recently as AWS’ vice president for sales, marketing and support, before leaving to run Tableau in 2016.


“We’ve had a good leadership change at AWS with Adam Selipsky coming in,” Brian Olsavsky, chief financial officer of Amazon, said during his company’s earnings call. “Adam himself comes with a lot of Amazon history and knowledge and external CEO experience that has made him even stronger as he comes back. So we feel really good about the transition.”


During the quarter, AWS announced that it plans to further expand its public cloud footprint with the addition of seven new regions around the world. With the new regions and an expanding array of services, AWS is expecting continued growth in the months to come.


“Disruptive economic events like COVID have caused many people to step back and think about how they want to change strategically,” Olsavsky said. “Many have come to the conclusion that they do not want to own and run their own data centers and they assume they can save money and gain agility and innovation by moving to AWS.”

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