While conventional wisdom plus short-sighted math have caused a lot of people to believe that Amazon’s AWS is the runaway leader in the cloud, reality tells a very different story that will be underscored dramatically with next week’s Q1 earnings results.
On my weekly Cloud Wars Top 10 rankings, Microsoft has held the #1 spot for more than 2 years after displacing Amazon from that top position. AWS continues to perform superbly and holds the #2 spot on the Cloud Wars Top 10.
So what type of cloud revenue should we expect from those two powerhouses when they release earnings results next week: Microsoft on April 27 and Amazon on April 29? To see some further thoughts on this head-to-head competition, please check out today’s episode of my new Cloud Wars Minute daily news and commentary show.
I’m expecting Microsoft to report commercial-cloud revenue of between $17.5 billion and $18 billion for the 3 months ended March 31, which for Microsoft is its fiscal Q3. Bear in mind that’s not a projection for the entire Microsoft corporation, but rather just for its enterprise-cloud business. The growth rate for that cloud business—by far the largest in the world—should be about 30% as Satya Nadella and company continue to defy the laws of physics with remarkable high growth rates on enormous bases of revenue.
I believe Amazon’s AWS cloud unit will crack $13 billion in quarterly revenue for the first time and post a growth rate in the range of 25% or 26%. As incoming AWS CEO Adam Selipsky prepares to assume that role in mid-May, no doubt he and predecessor Andy Jassy, who’s been promoted to CEO of the entire Amazon empire, are preparing lots of exciting new adventures for AWS in the second half of 2021.
So these two cloud companies—the two largest cloud businesses in the world—will themselves account for more than $30 billion in cloud revenue in the first quarter of the year. That’s a staggering number but I believe that for not only those two companies but also for every provider engaged in the Cloud Wars, the best is yet to come.
After all, as no less an authority than Andy Jassy himself recently said, the cloud currently accounts for less than 5% of total global IT spending.
This adventure is only getting started.
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