Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
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In this Cloud Wars Minute, I take a look at what Microsoft’s latest strong numbers indicate for it and AWS.
00:45 — Microsoft reported strong numbers for the full year and its fiscal Q4 ending June 30: $110 billion in revenue for the full year, up 27% in constant currency. For Q4, it reported growth of 21% in cloud revenue, up to $30.3 billion. That growth may be out of the hide of AWS.
01:35 — On the earnings call, Microsoft CEO Satya Nadella said that with Azure, Microsoft is a strong number two. He means it’s number two in the infrastructure game. It’s leading in the new artificial intelligence (AI) workloads market. Customers using other clouds are now using Azure for some of their new AI workloads. Customers are moving to Azure from other clouds.
02:29 — Nadella certainly did not mention AWS by name. But he was talking specifically about what’s going on in the cloud infrastructure market. Without question, AWS is the big dog in cloud infrastructure. If market share is going to be taken, it makes the most sense that it is coming out of AWS.
03:34 — Additionally, since AWS has been on a sharp decline in its growth rate, it’s very logical to think that Microsoft’s gains are coming primarily or in large part from AWS. I don’t think there’s so much of a chance it’s coming from Google Cloud, whose growth has held up.
04:07 — Microsoft has taken a very strong approach to what it’s doing with infrastructure for these new AI workloads. It’s got the relationship with OpenAI, for the large language models, and with the supercomputers that Microsoft provides to run those. Nadella’s earnings call remarks indicated that customers are showing strong demand for these new AI and cloud services.
05:14 — AWS is, in some ways, going to be the victim of that growth over at Microsoft. More on that later today, and there will also be extensive coverage to come about what’s going on with AWS.