This week Microsoft, Amazon Web Services (AWS), and Alphabet all reported strong growth in their cloud businesses. And new Q4 data from Synergy Research Group shows that spend on cloud infrastructure services in the last quarter of 2017 jumped 46 percent from the final quarter of 2016, comfortably beating the growth rates achieved in the previous three quarters.
Microsoft led the pack in terms of cloud growth. For its quarter ending Dec. 31, 2017, Microsoft said its Azure revenue increased a whopping 98 percent, although the company doesn’t break out the revenue figure.
“When it comes to infrastructure, we’re the only cloud provider that provides true hybrid cloud computing with Azure and Azure Stack,” said Microsoft CEO Satya Nadella, according to a Seeking Alpha transcript. “Since broad availability just a few months ago, we are seeing incredible customer demand for Azure Stack across a diverse set of industries.”
While Microsoft’s cloud business grew the fastest in the quarter, Amazon Web Services is still the biggest cloud provider.
For its fourth quarter 2017 Amazon reported that its AWS revenue soared 45 percent to $5.1 billion. AWS exited the fourth quarter on a $20 billion annual run rate, said Amazon CFO Brian Olsavsky on the company’s earnings call.
For the quarter “AWS maintained its dominant position with revenues that exceeded the next four closest competitors combined, despite huge strides being made by Microsoft,” noted Synergy Research.
With AWS contributing about 10 percent to parent company Amazon’s total 2017 revenue, one analyst asked if it might be spun off into a company with separate management. Olsavsky said Amazon, itself, is one of the biggest consumers of AWS. “So as an internal customer, the consumer business is very happy with AWS,” he said. “And I think AWS is also very benefited by the fact that they have a large internal beta customer that tries out and uses a lot of their products and services. So it’s a good combination for a lot of reasons, and we see no reason to change the structure that we have.”
Sundar Pichai, CEO of Google’s parent company Alphabet, said “Google Cloud has reached meaningful scale, and I’m excited to share today that it’s already a $1 billion per quarter business. In fact, we believe that Google Cloud Platform, based on publicly reported data for the 12 months ending December 2017, is the fastest growing major public cloud provider in the world,” according to a transcript.
Synergy Research Group analyst John Dinsdale said, “We fully expected a year-end boost in cloud growth rates but the numbers came in a little stronger than anticipated, which says a lot about just how robust are the market drivers.”