Generating almost $53 billion in cloud revenue during their most-recent quarters, the world’s 9 largest and most-influential cloud providers have posted growth rates ranging from Google Cloud’s top-ranked 46.6% to the head-scratching 8% for IBM and SAP.
On my weekly Cloud Wars Top 10 rankings, Microsoft is #1, Google Cloud is #3, SAP is #5, Oracle is #6, ServiceNow is #7, and IBM is #9. The numbers shown in the headline above and explained in this article have to do with cloud-revenue growth rates for the vendors’ most-recent quarters.
First of all, kudos to Google Cloud and Oracle for achieving hypergrowth status in today’s incredibly competitive market.
And since we last stack-ranked the fastest-growing major cloud providers, Salesforce, Workday and Oracle have released new quarterly figures that I’ve incorporated into the adjacent table.
Of those three companies for which we have new information, perhaps the biggest surprise came from Oracle.
While the company did not release an all-in figure for cloud revenue, it dropped enough clues to allow observers for the first time to draw a highly educated guess at just how big its cloud revenue is, and how quickly that figure’s growing. On its March 10 earnings call, Oracle indicated that for the quarter ended Feb. 28, its cloud ERP and cloud HCM revenue reached $1 billion on a 24% growth rate, and its cloud infrastructure business reached $500 million on a 100% growth rate.
Doing some reverse-ciphering on my AI-powered whiteboard, I calculated that the combined $1.5 billion from those two numbers represented a combined growth rate of about 42%. And since Oracle has some other smaller-volume cloud products that were not included in either figure, I bumped up my total cloud-revenue estimate to $1.65 billion and cut the growth rate to 40%. For additional details, please see Oracle CEO Safra Catz: 6 Reasons to Be Bullish on Oracle Cloud.
Six weeks ago, I posted an article headlined Salesforce Q4 Earnings: Can Marc Benioff Reverse Sharp Slide in Growth Rate? That question and the premise behind it was based on the downward trend in growth rates reported by Salesforce for the previous 8 quarters:
- FY19 Q4: 27% revenue $3.6 billion
- FY20 Q1: 26% revenue $3.74 billion
- FY20 Q2: 23% revenue $4.0 billion
- FY20 Q3: 34% revenue $4.5 billion
- FY20 Q4: 34% revenue $4.85 billion
- FY21 Q1: 31% revenue $4.87 billion
- FY21 Q2: 29% revenue $5.15 billion
- FY21 Q3: 19% revenue $5.42 billion
So in its FY21 Q4 report for the 3 months ended Jan. 31, Salesforce did indeed stem the downward slide in growth rates as revenue rose 20% to $5.82 billion. That’s the good news. The not-so-good news is that while 20% on a very large base is extremely impressive, it does not stack up so well against the Q4 numbers for the previous two years: 27% for FY19’s Q4, and 34% for FY20’s Q4.
Indeed, for its full fiscal 2021, Salesforce posted revenue growth of 24%, well above Q4’s 20% during the year-end period companies like Salesforce tend to want to finish with a bang.
Still, that is a marvelous problem to have: a $21-billion business growing at 20%. I would not be at all surprised if the company’s industry-clouds business begins to play a bigger part in pushing that growth rate even higher: Has Salesforce Beaten Microsoft, Oracle & SAP to #1 in Industry Clouds?
Reaching $1 billion in quarterly subscription revenue for the first time, Workday saw its revenue climb 20% on the strength of steady ongoing demand for its flagship HCM products as well as its Financials suite.
Now billing itself as the Enterprise Management Cloud and determinedly steering well clear of any type of “ERP” designation, Workday is eagerly awaiting what it believes is a coming boom in cloud finance applications from CFOs:
- CFOs Finally Ready to Surge into the Cloud: Workday co-CEO Bhusri
- Workday Co-CEO: Liberating CFOs from ERP Limitations
What’s up with IBM and SAP?
As heady as some of the growth numbers on this chart are, it’s impossible not to wonder how IBM and SAP could deliver cloud-revenue growth rates of only 8% for Q4. No doubt both companies offered all manner of explanations and cited various factors, but Q4 growth rates of 8% in the greatest growth market the world has ever known will draw a lot of attention and scrutiny, with a lot of that not being good.
At SAP, North America president DJ Paoni told me last week that business for SAP’s cloud products “is exploding” and that the company’s new Rise program, designed to simplify customers’ journeys to the cloud, has been met with great enthusiasm. That’s good to hear—but in late April, we’ll find out exactly how closely those expressions of optimism are matched by customer contracts. For the full story from Paoni on that, please see SAP Rejects Larry Ellison Claims of Customer Turmoil: ‘Demand Is Exploding’.
IBM has been doing some good things lately. Earlier this month, I was particularly impressed by a unique new offering that led me to ask, Can IBM Reignite Cloud Growth With Impressive New ‘Satellite’ Service?
And we’ll find out the answer sometime around April 15.
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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