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Cloud boom helps big tech bottom line

by on27 October 2017


Amazon, Microsoft, Google and Intel cash in

Amazon, Microsoft, Google, and Intel are making a killing from the Cloud.

All four companies posted stellar quarterly earnings on Thursday, showing the strength of the shift in corporate computing away from company owned data centres and to the cloud.

Microsoft’s Azure business nearly doubled, with year-over-year growth of 90 percent. The company does not break out revenue figures for Azure, but research firm Canalys estimates it generated $2 billion for Microsoft.

Highlighting the quarter for Microsoft was a deal securing retailer Costco as an Azure customer. That came just two months after the close of Amazon’s acquisition of grocery chain Whole Foods, which has heightened unease among retail and e-commerce companies about working with Amazon.

There are some analysts who think that Amazon could find it needs to make changes at some point at Amazon Web services and might need to spin off its cloud operations.

Amazon Web Services is still delivering far more revenue than anyone else. It raked in $4.6 billion this quarter – a year-over-year increase of 42 percent. AWS secured deals with Hulu, Toyota Racing Development, and General Electric.

Google Cloud Platform landed deals with the likes of department store retailer Kohl’s and payments processor PayPal. Google Cloud Platform is thought to have generated $870 million in the quarter, up 76 percent year-over-year.

Google Chief Executive Officer Sundar Pichai said Google Cloud Platform is a number three priority for the company. He said Google plans to continue expanding its cloud sales force.

Canalys estimates the cloud computing market at $14.4 billion for the third quarter of 2017, up 43 percent from a year prior. Amazon holds 31.8 percent of the market, followed by Microsoft at 13.9 percent and Google with six percent, according to Canalys’ estimates.

Canalys research analyst Daniel Liu said: “The cloud market will keep growing faster than most of the traditional information technology segment, as the market is still in the developing stage.”

Reflecting the overall growth of the market was the strong performance by Intel, which sells processors and chips to cloud vendors. In July, Intel launched its new Xeon Scalable Processors, which drove seven percent year-to-year growth for the company’s data centre group.

The big three cloud vendors also benefit from the decision by many enterprises to build their applications using more than one cloud vendor. Retailers Home Depot and Target Corp use a combination of cloud providers.

Some analysts expect cloud services growth to slow over time as competition increases.

 

Last modified on 27 October 2017
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