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.
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00:37 —Last week, three companies reported their fiscal Q3 earnings. What was consistent is they all see customer demand picking up. There is a chance for significant optimism here circling around that intersection where artificial intelligence (AI) meets the cloud. These companies are Workday, Snowflake, and Salesforce.
01:34 — Workday raised its full-year guidance, so it’s expecting more good things to happen in Q4. Subscription revenue came in at 19%. Its total subscription revenue backlog for this quarter ended October 31 was up 31%. Last quarter was up 32%. So this wasn’t just one big deal or some one-time blip.
02:20 — Snowflake also raised its full-year guidance to about 37% growth for the year. I think $2.65 billion is their target for their fiscal year. Product revenue for the last quarter was up 34% to almost $700 million. CEO Frank Slootman said that it will be a huge beneficiary of this movement toward the intersection of data and AI.
03:13 — Now over at Salesforce, revenue is up 11% to 8.7 billion. Benioff flipped from being growth-oriented to being margin and profit-focused. Can it continue to grow anywhere close to other Cloud Wars Top 10 companies? Benioff has been reluctant to say anything that would lead people to think growth is imminent. On his call, somebody said, “Does that give you reason to think that the buying environment’s changed?”
04:14 — Benioff said we don’t want to give you, in any way, an indication that the environment is changing. But Benioff then said, however, there’s lots of green shoots shooting up. There are opportunities everywhere; customers are excited.
05:02 — He was trying to show that Salesforce, like the other Cloud Wars Top 10 companies in a booming market, is trying to figure out the best way to help customers move into this AI-powered future. Benioff got to the point where it was impossible to tell which side he was on. Yes, things are getting better. No, they’re not. He was arguing both.
05:24 — But for these three companies that report on the latest quarterly cycle, everything is looking good in spite of Benioff’s protestations. This bodes well for a very strong year in 2024. Next week, Oracle will release its fiscal Q2 numbers on Monday, December 11. We’ll have lots to talk about.