There are only three companies that really matter in public cloud computing these days, and each recently reported its earnings. In the course of those earnings calls, however, Amazon Web Services (AWS), Microsoft, and Google offered highly varied levels of detail on how their cloud businesses are actually doing. Each described the gargantuan, multi-billion dollar CapEx investments they're making in cloud infrastructure, but that's where the similarities ended.
Google, with the most to prove, actually said the least. AWS, way out in front, was also uncharacteristically mum on its cloud business, perhaps not feeling the need to do much to sell Wall Street on its lead, other than revealing one key number. Microsoft, however, went deep and long on details about its cloud business, perhaps indicating a growing confidence in its ability to bridge the chasm between it and AWS.
The challengers challenge
The biggest surprise of the three earnings calls was just how little Google said about its IaaS and PaaS businesses. Beyond basically saying that things are going great, the details on what "great" means were sparse. Google executives did indicate that the size of deals keeps going up, and also mentioned that data analytics and artificial intelligence (AI) have been the key drivers of cloud differentiation for them. But that was it. Things may, in fact, be awesome over at Google Cloud. If so, Google is largely keeping it a secret.
This seems like a mistake.
Microsoft, for its part, determined not to make the same mistake. While the company has been hazy on the details of its successes in past calls, it decided to do the exact opposite for its fiscal Q3 2018 earnings call. In fact, the company wasn't content to simply talk up its cloud business, but also launched a range of web pages to showcase customers that are using Microsoft Azure, many with machine learning and AI skews to the stories.
Microsoft, which talked up its 98% growth last quarter, called out another 93% revenue growth this quarter (year over year). What's driving that growth? On its call, Microsoft CEO Satya Nadella gave a similar but different response to that offered by Google: "hybrid, developer productivity, trusted security and compliance and new workloads such as IoT and AI at the edge."
It's that hybrid story where Microsoft can credibly claim a lead, but it's also challenging Google for the right to be thought of as the machine learning cloud. A big part of Microsoft's story, and one backed up by its history, is the tooling it's building around machine learning.
"We have the best deployment tools and development tools in Azure. We have this common data model. On top of this, we have the best BI visualization technology," Nadella said on the call; not to mention the ability to pull together a holistic, hybrid story. In so doing, Nadella feels it's cloud story becomes "very differentiated."
There was, of course, some unrealistic chest-thumping, like calling out Cosmos DB as hitting $100 million in its first year (without the requisite asterisk that the revenue had a running head start in its former DocumentDB incarnation), but that's excusable. While still way behind AWS, Microsoft Azure is a credible, strong no. 2, operating at peak efficacy.
The front runner runs even faster
With Microsoft, in particular, aggressively pitching its message to the market, AWS could have been excused for stressing its leadership position, but it didn't. In fact, Amazon didn't go into any real detail on its dominant cloud business beyond one key number that probably said all that the company needed to say: 49%. Despite sitting atop a roughly $22 billion run-rate, AWS revenue has gone up in the last two quarters (from 42% to 44%, and now from 44% to 49%).
SEE: Special report: The art of the hybrid cloud (free PDF) (TechRepublic)
What's behind that revenue growth? According to Amazon CFO Brian Olsavsky on the call, AWS continues to see "strong usage both by existing customers and new customers," as well as "increased pace of enterprise migrations as customers are having success with AWS and increasingly trying new services." In addition, "We are seeing people move more and more of their workflows to AWS and at a faster pace," Olsavsky said on the call.
Summarizing this, Olsavsky noted: "[W]hat is driving the growth, we believe, again, it's the value that we create for AWS customers. We have the functionality and pace of innovation that others don't. We have partner and ecosystem that others don't. And we have proven operational capability and security expertise that's highly valued to the AWS customer base."
In AWS' position, again, the only real detail it needed to reveal was the acceleration in growth. Everything else gets overshadowed by that number. Why? Because it suggests that no matter how well its competitors are doing, they're not going to catch it absent a serious misstep, which seems unlikely based on how it's currently operating.
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Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.