Unleashing a slew of GenAI innovations while continuing to expand aggressively in all other areas of the cloud, Google Cloud has jumped to #2 on my Cloud Wars Top 10 weekly rankings and pushed Amazon’s AWS to the #3 spot.
Here are the latest Cloud Wars Top 10 rankings, which I’ve been posting weekly for more than 6 years — and I’ll be sharing more changes to the list over the next week or two.
So why am I making this change? After all, isn’t AWS (Q1 revenue $21.4 billion) almost 3X bigger than Google Cloud (Q1 revenue $7.45 billion)?
Well, while size certainly does matter, the GenAI revolution is creating, in my opinion, an extremely sharp and stark dividing line between what I’m going to broadly call the Productivity Cloud Era and the brand-spanking new Innovation Cloud Era.
Spearheaded by GenAI, this new period is vastly different from the past, which was largely vendor-defined and vendor-driven. In this new Innovation Cloud Era, the conversation is much less about IT architecture and cost savings and data centers — although those remain vital behind-the-scenes elements — and much more about truly unleashing human creativity and opportunity.
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And I believe Google Cloud absolutely personifies this new outlook, this new mindset, this new — wait for it! — paradigm. This 2-minute video offers some inspiring stories of innovation and true transformation from a wide range of customers.
In particular, let me offer verbatim comments from two customers featured in that video and representing vastly different businesses and sets of challenges:
- Deutsche Bank chief technology, data, and innovation officer Bernd Leukert: “Now with Generative AI, we can have much smarter conversations with our customers…Generative AI can be incorporated in all of the business processes Deutsche Bank is running…There are no limitations!”
- Wendy’s president and CEO Todd Penegor: “The Google partnership has taught us to lean in, to iterate, to test and learn, and have the courage to fail fast where we need to…The partnership with Google has inspired us to leverage technology to truly transform the whole restaurant experience.”
So we have GenAI powering every single process in one of Europe’s largest banks to enable better engagements and experiences with clients, and we have Wendy’s CEO embracing the power of fast failure as a key element of transforming and elevating the traditional restaurant experience.
That is what customers today want and need! That is the path to success in the customer-driven digital world! And that is the true power and potential of the Innovation Cloud!
Last week, Google Cloud showcased many such forward-looking customers at its Executive Forum in Sunnyvale. At the event, I asked Google Cloud CEO Thomas Kurian to describe the impact GenAI is having on customers, and here’s what he said.
“We are experiencing one of the most significant technological shifts in history, with AI becoming increasingly foundational to everything we do. In this time of rapid innovation and change, Google Cloud’s leadership in AI is being used to improve all aspects of cloud computing, from data and infrastructure, to security and collaboration. We believe AI can open up new opportunities to improve user experiences in every industry around the world, and Google will continue to pursue this space — boldly and responsibly — to help our customers achieve amazing technological advancements, and deliver valuable user experiences.”
I really like the “boldly and responsibly” combination. Some tech companies are over-rotating toward the “bold” side without enough consideration for the responsibility gap they’ve created, while others are so preoccupied with avoiding every conceivable possibility of risk of any kind that they’re unable to deliver any type of meaningful innovation or advantage.
Throughout my time at the Google Cloud event, every person I met with and/or heard from — including many customers — was able to articulate very clearly and persuasively how the company is pushing hard on being both bold and responsible while keeping each factor in proper equilibrium.
The Greatest Growth Market World Has Ever Known
Along with that strategic reasoning behind the ascendance of Google Cloud over Amazon to the #2 spot on the Cloud Wars Top 10, my decision was also heavily influenced by some numbers, specifically financial results over the past several quarters. And yes, I’ll say it again: I fully realize that AWS’s revenue is almost 3X as big as Google Cloud’s.
But since I launched the Cloud Wars Top 10 more than 6 years ago, growth has always been a primary factor in the rankings because revenue growth is a massively objective measure of where customers are putting their money in a market crammed with superb competitors.
So let’s look at the growth rates of Google Cloud and AWS over the past 5 quarters, and I’ll start with Q1 of 2022 and move forward to Q1 of 2023:
- AWS: 37%, 33%, 27%, 20%, 16%
- Google Cloud: 44%, 36%, 38%, 32%, 28%
Clearly, both have seen growth rates moderate significantly over those five quarters as the market has gotten tighter and, per the laws of large numbers, their revenue bases have gotten larger. (You can also see more insights on this topic in AWS Growth Rate Plummets to 16%, Way Below Microsoft Cloud’s 22%.) But during a time of customer uncertainty, Google Cloud has been able to retain far more of its marketplace momentum than has AWS.
And in my analyses of who goes where on the Cloud Wars Top 10, those types of numbers carry a huge amount of weight.
We all know the tech industry has undergone massive transitions over the past 40 years from mainframes to mobile and everywhere in between. And I fully believe that the GenAI revolution will mark the beginning of yet another epoch in this remarkable journey as the tech-centric Productivity Cloud Era gives way to the customer-centric Innovation Cloud Era.
Enjoy the ride — it’s going to be incredible.
And well done, Google Cloud!