![]() Though growth slowed to 50% Y/Y this quarter, Microsoft Azure continues to grow it’s presence in the public cloud. This confluence of factors illustrates that Amazon is a well-positioned, dominant platform within the public cloud market for the long-term.ģ. There is also anecdotal evidence that they are witnessing cloud migration plans accelerate as a result of COVID-19. Finally, management stated they are well-positioned longer-term, noting their average AWS contract length is over three years long. As they prepare to handle future compute loads, Amazon purchased PP&E under finance leases totaling $3.2B this quarter, which is down slightly at (4.6%) Y/Y. This quarter, AWS accounted for just 12.2% of Amazon’s total consolidated revenue, but a staggering 57.5% of their consolidated operating income. Despite these near-term headwinds, management teams point to the deep relationships they have built with their client base, in addition to their expanding product suites, as factors that will enable them to experience stable growth over the long-term.ĪWS is a highly strategic, and profitable, business unit with Amazon. Among other contributing factors, the three largest public cloud vendors all experiences contraction in their % Y/Y revenue growth rates. On the other hand, many sectors hit hardest by the global pandemic were forced to cut costs and restrict budgets, leading to many organizations slashing their cloud instances. Long-term prospects for public cloud vendors remain positive, despite near-term growth headwinds as a result of COVID-19ĬOVID-19 has forced many enterprises to pull-forward digital transformation initiatives. This post is an overview of our findings, please visit our LinkedIn SlideShare for a copy of the full report.ġ. Longer term, Google is focused on enhancing their artificial intelligence offerings and a continued focus of investment into product R&D. Notably, they highlight new customer logos include Deutsche Bank, Lowe’s and Dr. Google Cloud grew 43.2% Y/Y, generating $3.0B in revenue this quarter. Among others, Microsoft noted several new impressive customer logos including Johns Hopkins, Workday and National Australia Bank. ![]() Management highlights their focus on artificial intelligence and cognitive services as a factor in their ability to support customer’s cloud computing needs and demands. ![]() Management is pleased with the way in which they navigated the turmoil from COVID-19 and the strength of relationship that they have built with their current customer base through help in optimizing cloud consumption through these unprecedented times.Īzure grew 50.0% Y/Y, on a constant currency basis, which is a significant deceleration from the previous quarter where they grew 61.0% Y/Y. Despite these near-term headwinds, the long-term market opportunity and growth potential for these cloud platforms remains strong and is expected to show resilience and strength as the economy slowly sheds the effects of the current pandemic and migration to the cloud is accelerated.Īmazon grew 29.0% Y/Y, on a constant currency basis, ending the quarter at $43.2B in run-rate revenue. As a result, AWS, Azure, and Google Cloud each witnessed material deceleration in Y/Y revenue growth. Select industries like travel and hospitality were hit hardest, forcing select companies to pare down cloud instances and usage. economy faced the prolonged effects of the current global pandemic. In the most recent quarter (Q2’20), the three most significant domestic providers of public cloud services endured a more difficult commercial environment, as the U.S. The following is based on publicly available earnings transcripts as well as press releases issued by Amazon, Microsoft and Google. As part of our work we closely track the major public cloud platforms: Amazon AWS, Microsoft Azure and Google Cloud and what these platforms are experiencing regarding their adoption and growth. ICONIQ Growth has been actively investing in cloud companies since our inception. ICONIQ Growth: Q2 2020 Cloud Commentary Report
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