Offering a powerful combination of innovation plus incumbency, Oracle, SAP, and IBM have all seen their market caps rise over the past five weeks while every other company in the Cloud Wars Top 10 experienced declines.
Derided by shallow thinkers as out-of-touch dinosaurs incapable of competing in the digital world, Oracle and SAP and IBM are all experiencing robust growth in the cloud. Look at their cloud-revenue growth figures in their most-recently completed quarters:
- Oracle 45%, making it the fastest-growing major cloud provider in the world;
- SAP 38%, making it the second-fastest; and
- IBM 19% as its cloud business continues to build solid momentum.
Each of those companies has spoken confidently about future growth prospects for their cloud businesses, with executives from Oracle and SAP being the most bullish.
In the context of those performances, the corresponding market-cap figures provide compelling evidence that each of those companies has earned the trust and confidence of the market in their abilities to continue being ambitious and even pace-setting players in the savagely competitive enterprise-cloud sector.
Of the 7 other Cloud Wars Top 10 companies, 6 are cloud natives. The outlier is Microsoft, which shares the “legacy” vintage of Oracle, SAP, and IBM but saw its market cap decline over the past five weeks.
Before presenting those current valuations and the increase/decrease since early October, I’d like to offer a few observations on why these comparisons are particularly relevant in these turbulent times of rampant disruption and upheaval.
- The hybrid thing. The ability for a company to cut across the worlds of cloud, on-premises, and edge has never been more essential, and the ability of the three “old-timers” highlighted above to do so better than any other companies on the planet is being recognized and rewarded by customers.
- Meet customers where they are. While I take a back seat to no one in my belief that the cloud has spawned the greatest growth market the world has ever known, on-premises technology will be with us for many years to come. And some of the cloud natives are still struggling to establish the needed expertise in that realm of traditional technology.
- Industry-cloud phenomenon. The deep vertical-industry expertise those three well-seasoned companies have amassed over the decades has never been more valuable than it is today as industry clouds and purpose-built clouds become the next very big thing.
- Don’t confuse “seasoned” with “sclerotic.” While we have all been dazzled by the shiny newness and generally outstanding growth and innovation of the cloud natives, it’s not like the veterans have been frozen, unchanging, in amber. All three have made massive commitments to the cloud and have done so in very different ways, with each giving customers unique opportunities to connect their on-prem worlds with the new.
So in this context, here’s the Cloud Wars Top 10 list in their current ranked order, and next to each you’ll see that company’s market cap from Oct. 4; then its market cap from yesterday, Nov. 7; and then the percentage swing up or down over that five-week period.
|Company||Market Cap from 10/4||Market Cap from 11/7||Five-Week Percentage Swing|
|1. Microsoft||$1.8 trillion||$1.65 trillion||-8.3%|
|2. Amazon||$1.28 trillion||$928.2 billion||-21.3%|
|3. Google||$1.29 trillion||$1.12 trillion||-13.2%|
|4. Salesforce||$147.7 billion||$139.8 billion||-5.3%|
|5. Oracle||$169.9 billion||$204.9 billion||20.6%|
|6. SAP||$99.8 billion||$112.3 billion||12.5%|
|7. ServiceNow||$79.0 billion||$73.1 billion||-7.5%|
|8. Workday||$39.2 billion||$33.9 billion||-13.5%|
|9. Snowflake||$55.1 billion||$42.3 billion||-23.2%|
|10. IBM||$108.9 billion||$122.8 billion||12.8%|
Of course, market caps are fickle things, and a month from now, the trends revealed here could look very different. But what Oracle and IBM and SAP have unmistakably shown is that in a time of massive transition, there’s enormous value in knowing not just where the world is headed but where it’s been—and where much of it remains.
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