Using market share along isn't a very good measure, because it hides that fact that they entire market is growing significantly, far outpacing the market share loss.<p>It's not that Microsoft is stealing customers from Amazon. It's that both companies are brining in lots of new to the cloud customers, and Microsoft is just doing it faster.<p>But both businesses are growing at enviable rates.
Didn't realize Google Cloud was so far behind in revenue and growth. Seems like it would be risky for companies to switch to Google Cloud because it might end up in the graveyard.
My biggest takeaway from this article was that while Google publicly reports its "cloud" revenue (including GSuite revenue) as $8 billion a year, its cloud computing revenue (the portion that competes with AWS and Azure) is at $1-2 billion a year.<p>That would explain why Google would be willing to shut down Google Cloud in 2023 if they are not one of the top 2 players in this space. (Additional context and previous discussion below.)<p>[1] The Information: <a href="https://www.theinformation.com/articles/google-brass-set-2023-as-deadline-to-beat-amazon-microsoft-in-cloud" rel="nofollow">https://www.theinformation.com/articles/google-brass-set-202...</a><p>[2] Discussed on Hacker News previously: <a href="https://news.ycombinator.com/item?id=21815260" rel="nofollow">https://news.ycombinator.com/item?id=21815260</a>
It's actually a great testament to Microsoft's execution that they were able to catch up (to some extent at least), despite AWS having a seven year head start.<p>Bezos himself called this a business miracle (the seven year head start, that is): <a href="https://youtu.be/f3NBQcAqyu4?t=2133" rel="nofollow">https://youtu.be/f3NBQcAqyu4?t=2133</a><p>And this is against Amazon, which is known for execution. I suppose we're in for a fun couple of years, especially with the JEDI contract soap opera and all that.
Financial inquire: I would like to see the breakout from MSFT on what is actual Azure revenue. That would be a good comparison with AWS on the revenue side. MSFT now includes the O365 entire suite and other SAAS products with their cloud revenue. Office is huge alone.<p>Also, genius tactic, MSFT gives you free SQL Server, Windows Server, and Exchange when you buy Azure credits. I have friends with expiring Azure credits coming up soon, waiting to see how MSFT handles. MSFT has massive cash, so prob extend for free or some other magic move.<p>Edit: For context, these are multi millions dollars in Azure credits, some 20M+, not being used.
One thing to note is that the cloud is only about 5% of total IT expenditures. So getting data which has never been on the cloud is more important than taking data away from competitors.
So, there's a thing I wonder about cloud businesses, Amazon or anyone else's. How much of this is funded by businesses that are not profitable, but are running on VC money? I recall the IPO documentation for companies like Uber stating a stupendous amount of their $$ going for AWS.<p>I am reminded of Paul Graham's description of Yahoo's advertising business in 1999. Lots of paying customers, things seem great, you're solidly profitable. But what if most of your customers aren't profitable? What happens when the next recession comes?<p>Not saying cloud computing is going away, but I think its current apparent growth rates are being propped up by a lot of Softbank (and similarly unprofitable) investments, which will go away fast when the next recession comes. Until then, we don't really know how profitable cloud computing is as a business. It may not be as good as it looks right now.
Here's the thing though, they actually <i>don't</i> have to fend off rivals. Amazon's cloud business is based on excess capacity that they have as one of the internet's biggest chokepoint in traffic (post-Thanksgiving holiday spending). When I took managerial accounting classes, we looked at situations where it would seem on paper that producing a certain good would lose money, but when you compared total profitability in letting excess capacity sit idle and distributing fixed costs like rent and overhead, you can actually sell a good for a loss. Amazon doesn't have to make more money than they spend on cloud computing, they only have to make more money than what they would have had to spend on cloud computing without competing on the market.