Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
This episode is sponsored by Acceleration Economy’s “Cloud Wars Top 10 Course,” which explains how Bob Evans builds and updates the Cloud Wars Top 10 ranking, as well as how C-suite executives use the list to inform strategic cloud purchase decisions. The course is available today.
00:10 — After an extended period of moderating cloud investments, it looks like things are starting to turn around. We get that observation from none one other than Microsoft CEO Satya Nadella. Microsoft quarterly Cloud revenue is up 21%, to an astonishing $30.3 billion.
00:50 — Nadella said that customers’ recent optimization phase is about to wind down. During the pandemic, he said, the need for companies to boost their technological capabilities was so intense, that they were just diving into the project start phase. They never followed up with optimization and what we’ve experienced over the last four to six quarters has been “catch-up optimizations.” That led to a cloud slowdown.
01:52 — In the next two quarters, all that catch-up optimization is going to be done. A lot of new project starts are out there right now. New deployments range from full-scale cloud migrations, to data applications to investment in artificial intelligence (AI) applications. Very soon, Nadella says, we’ll get back to the normal pace of new project starts.
02:51 — We’re seeing proof of this within Microsoft; it isn’t just a philosophical outlook. Nadella and CFO Amy Hood spoke very precisely about how they react to “demand signals in the marketplace.” They said, without question, the demand signals from customers indicate that there’s going to be a need for significantly expanded cloud infrastructure on Microsoft’s part.
03:40 —The fact that this is coming from the company that has been number one on the Cloud Wars Top 10 for more than four years, from the CEO who has led this and who I think has superb instincts, is good news for everybody.