With Microsoft, Amazon and IBM generating $163 billion in 2021 cloud revenue, the Cloud Wars Top 10 will reach a combined total of $241 billion in cloud revenue this calendar year, according to my estimates.
That aggregate figure of $241 billion is even more impressive when we recognize that Snowflake, which recently jumped into the Cloud Wars Top 10, will report revenue of “only” $1 billion for 2021 despite growing in triple digits. That means the other 9 cloud providers will generate $240 billion in cloud revenue this year, for an average of $26.7 billion for the top 9 companies.
I’ll break out the specifics in a moment, but first want to offer a few thoughts on just how big this market has become, and how massive it will be in the future.
- Amazon CEO Andy Jassy recently said that in spite of the booming market for cloud services, the enterprise cloud accounts for less than 5% of total global IT spending, meaning the runway’s incredibly long.
- The past year has great accelerated the move to customer-centric digital business, and the cloud is without question the optimal foundation for digital business.
- The companies in the Cloud Wars Top 10 are all expanding their range of technologies and solutions as rapidly as possible beyond what they offered in the first wave of the cloud. As they expand the boundaries of the cloud to meet the growing demand from businesses for new and highly differentiated digital capabilities, the overall IT market will become much larger than it has been in the past.
- The cloud’s ability to turn world-changing technologies such as ML, AI and augmented reality into mainstream business tools will be a huge factor in that market expansion.
- The recent boom in demand for industry-specific solutions will, I believe, trigger an accelerated wave of innovation that goes beyond the traditional boundaries of enterprise applications such as ERP, HCM, and CRM. (For more on this, please see Has Salesforce Beaten Microsoft, Oracle & SAP to #1 in Industry Clouds? and check out our new Industry Cloud Newsletter.)
At the top of this article, I gave a peek at my cloud-revenue projections for the 3 companies that I’m predicting will generate the largest volumes of cloud revenue in calendar 2021: Microsoft with $75 billion, Amazon with $60 billion and IBM with $28 billion.
Here’s how I see 2021 playing out for each company in my Cloud Wars Top 10. You’ve probably noticed that my Top 10 rankings are not based exclusively on volume of cloud revenue—while certainly an important factor, it’s not the only factor. So you’ll see that while I’m projecting IBM will have the third-highest cloud revenue in calendar 2021, I’ve got IBM slotted at #9 on the Cloud Wars Top 10 weekly rankings.
If IBM can continue to get its act together, it certainly has the potential to move up in the rankings, particularly since its projected 2021 cloud revenue of $28 billion is about 40% higher than the combined projected-2021 cloud revenues of the 3 companies immediately above IBM on the Cloud Wars Top 10: #6 Oracle about (I’m projecting 2021 cloud revenue of $8 billion), #7 ServiceNow ($6 billion) and #8 Workday ($5 billion).
Here’s a look at my revenue outlook for each company in order of their positions on the Cloud Wars Top 10. If you’d prefer to watch this roundup on video, please check out my corresponding Cloud Wars Minute episode in which I review all the numbers.
For the quarter ended Dec. 31, Microsoft reported what was by far the highest quarterly cloud revenue any company has ever reported: $16.7 billion. Based on that and its remarkably consistent track record of high-growth performance, I’m expecting Microsoft to reach $75 billion in cloud revenue for this calendar year. I’m not referring to Microsoft’s fiscal year, which ends June 30, but rather the full calendar 2021.
With incoming CEO Adam Selipsky scheduled to join the company in mid-May, AWS should hit no transitional speedbumps as it continues to grow at 25% or better, which puts it on track to finish 2021 with $60 billion in cloud revenue.
3. Google Cloud
Since taking over as CEO 27 months ago, Thomas Kurian has been pushing Google’s cloud business in new directions, highlighted by his move into AI-powered industry-specific solutions. Kurian recently said that customers are making it clear to him that the next big deliverable for the cloud is the “digitization of industries.”
Marc Benioff’s been targeting $25 billion this year for some time, and his company’s performing masterfully. The only surprise I expect here is if Salesforce somehow comes in closer to $26 billion than to $25 billion.
Coming off a weak showing last quarter with only 8% growth in cloud revenue, SAP has several strong initiatives coming together at the right time and I think it will rebound nicely and grow to $15 billion in 2021 cloud revenue versus about $12 billion in calendar 2020.
Oracle doesn’t break out its cloud revenue but I’ve run its various numbers through my AI-powered whiteboard and am projecting that Oracle will finish calendar 2021 with about $8 billion in cloud revenue. At the same time, I wouldn’t be surprised if that number comes in at or above $9 billion—Oracle’s cloud business appears to be truly hitting its stride as the boom market unfolds.
Bill McDermott’s made the company into an innovation superstar and his relentless focus on simplifying, accelerating and optimizing workflows is winning converts across the globe. I expect ServiceNow to post $6 billion in 2021 cloud revenue.
Co-CEO Chano Fernandez is on a mission to liberate CFOs from the limitations of ERP and to help them turn data into a competitive weapon. While the company doesn’t make much noise, it hums along with superb efficiency and innovation and I expect it to post $5 billion in calendar-2021 cloud revenue.
I believe IBM has all the necessary components to be a big-time player in the cloud—make that a bigger-time player—but has struggled to put everything together in a way that truly seizes the imagination of customers. After a disappointing cloud-revenue growth rate of 8% in Q4, I’m expected IBM to do significantly better in 2021 and jump from $25 billion to $28 billion.
The projected revenue figure of about $1 billion is clearly much smaller than that of every other top 10 player. But last quarter, Frank Slootman’s data-cloud company boosted revenue by 117%, and spiked RPO by 213%. Snowflake’s impact in the market is vastly greater than its currently modest revenue figure suggests.
So there you have it—and, rounding up just a bit, $241 billion just about equates to a quarter of a trillion dollars in 2021 cloud revenue for the Cloud Wars Top 10.
More evidence that this is, as you’ve heard me say before, the greatest growth market the world has ever known.
Disclosure: at the time of this writing, Google Cloud, SAP and Oracle were among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.
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