AWS, the largest public cloud provider, experienced another quarter of impressive Y/Y revenue growth, with continued momentum heading into Q4Ĭontinuing to establish itself as the leading cloud provider, Amazon reported run-rate revenue of $46B with a Y/Y growth of 29% in Q3, consistent with Q2 results. While COVID-19 remains challenging for enterprises, all 3 companies are committed to making strategic investments in their cloud business to capitalize on the digital transformation trend currently driving continued cloud momentum. Microsoft also noted significant investments in vertical products like Microsoft Cloud for Healthcare. Google announced investments in industry-specific solutions for consumer goods and lending and also highlighted pricing based on value as a key focus area. As the battle for cloud market share continues, the player who can deliver specialized solutions with demonstrated value is likely to dominate. Despite continued transactional weakness and volatility in certain industries such as travel, it is clear that cloud remains a significant growth opportunity for these businesses and all three are committed to making long-term investments with their product roadmap, GTM motions, and footprint - despite looking to drive cost efficiencies themselves across other areas of their businesses.Īs a result of this momentum, all three providers have made clear commitments to on-going investment into their Cloud businesses, with a particular eye towards industry-specific solutionsĪ common theme among AWS, GCP and Azure was an ongoing commitment to vertical industry solutions. All three cloud providers also highlighted significant commitments with new Fortune 50 customers and both Google and Amazon mentioned recent partnerships with various government agencies. One component of this is a rapid enterprise shift to the cloud to drive cost efficiencies, supporting continued revenue expansion and momentum and an increase of multi-year cloud contracts. On balance, the macro environment has created moderate tailwinds for cloud providers as movement to the Cloud continues to accelerate in order to support digital transformations and an increasingly remote workforceĭespite COVID-19 headwinds impacting certain customer segments, on aggregate, the macro environment has helped support growth for cloud providers.
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This post is an overview of our findings, please reach out to a member of the ICONIQ Growth team if you would like a copy of the full report. Among a growing number of partnerships, Microsoft highlighted the significance of their strengthened partnerships with Verizon and AT&T.
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Management highlights their consistent execution across core annuity sales motions as well as their focus on supporting customer needs for distributed cloud infrastructure as core drivers of their growth. Although not disclosed, we estimate Azure run-rate revenue to be around $25B as of Q3. Perhaps best signaled by their decision to break out Google Cloud in a separate reporting segment starting in Q4, Management expressed strong confidence in Google Cloud momentum and is committed to making long-term investments across their GTM motions, product roadmap, and data center footprint.Īzure grew 47% Y/Y, on a constant currency basis, which is a slight deceleration from the previous quarter where they saw 50% Y/Y growth.
Notably, they highlighted several key new logos including Best Buy, Nokia, as well as government agencies. Google Cloud revenue grew 45.0% Y/Y, generating $13.6B in revenue this quarter (although not disclosed, we estimate GCP run-rate revenue to be around $8B). AWS usage and backlog remained strong with an increasing number of multi-year contracts, although certain industries more impacted by COVID-19 experienced notable volatility. Despite continued COVID-19 headwinds, all three companies expressed confidence in on-going momentum driven by accelerated digital transformations across industries, requiring migration to the cloud.Īmazon grew revenue 29.0% Y/Y on a constant currency basis, ending the quarter at $46.4B in run-rate revenue. In the most recent quarter (Q3’20), the three dominant public cloud service providers saw consistent gains in Y/Y growth, although not uniformly. The following is based on publicly available earnings transcripts as well as press releases issued by Amazon, Google and Microsoft. As part of our work we closely track the major public cloud platforms: Amazon AWS, Google Cloud, and Microsoft Azure and what these platforms are experiencing regarding their adoption and growth. ICONIQ Growth has been actively investing in cloud companies since our inception. Written by Christine Edmonds, Vivian Guo, Caroline Ricksen
Please see HERE for our latest Cloud Commentary report (Q4 Cloud Commentary Report)
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