Microsoft, Amazon and Google all see Cloud revenue soar in Q3
by Paul Davenport Paul Davenport on

Microsoft Cloud saw revenues jump 36 percent year-over-year to $20.7 billion last quarter, pushing the company’s quarterly cloud earnings past the $20 billion threshold for the first time. Looking specifically at Azure infrastructure-as-a-service, revenues actually grew at a rate of 50 percent year-over-year, as enterprises continue turning to the cloud to connect their decentralized workforce.

But Microsoft wasn’t the only Big Tech company that saw their fortunes grow thanks to a hunger for enterprise cloud during the third quarter of calendar 2021.

Google Cloud revenue jumped 45 percent year-over-year to $5 billion, specifically as the company expanded their offerings for both edge and hybrid cloud deployments in recent months to similarly help companies support distributed workers.

Amazon Web Services (AWS), on the other hand, leaned into service updates over the past quarter that were aimed at initiatives including machine learning, which helped accelerate revenue growth by 39 percent to $16.11 billion last quarter. The new DL1 compute instance types, along with managed services for data visualization, a la Prometheus, were just a few of the new offerings highlighted in the latest AWS earnings report.

While each cloud giant played to their own unique strengths to expand their revenues over the past quarter, it all really boils down to conditions outlined by Microsoft CEO Satya Nadella:

“The case for digital transformation has never been more urgent or more clear,” Nadella explained on his most recent earnings call, adding that “digital technology is a deflationary force in an inflationary economy,” as he expects to continue seeing cloud revenues climb for years to come.

Despite the huge revenue gains, Google Cloud still ultimately failed to turn a profit, posting an operating loss of $644 million in Q3 2021. That figure was nearly half the $1.2 billion operating loss that Google Cloud posted in the year-ago quarter, but reflects a net-zero gain in actual market share against rivals Microsoft and AWS, who continue to dominate.

Google had originally set their prospects on becoming a “top two cloud provider” in terms of market share by 2023, if not abandon the cloud market altogether, according to reports that originally circulated back in 2019. With a virtual smorgasbord of unforeseen business challenges changing the enterprise landscape since those original marching orders were set by Google executives, it’s safe to say that the company won’t be exiting the Cloud market altogether, but carving out specific cloud niches for their products and services to remain competitive.

In fact, this is reflected in Forrester’s 2022 cloud computing predictions, which anticipate that Google (and ultimately Microsoft and AWS) will continue branching out into industry-specific cloud arenas for specific areas of growth. This shift is driven by the fact that many core cloud infrastructure offerings today are actually interchangeable, calling for service providers to start tailoring options for specific markets.

Regardless of industry, however, one of the biggest drivers of cloud adoption will likely be a continued focus on enabling flexible hybrid work, as many folks who took on remote schedules at the start of the pandemic begin rethinking their long-term situation. As companies continue to waver on firming up their back-to-office plans, enterprises will continue leveraging cloud infrastructure and solutions to connect their decentralized workforce.


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Filed Under: Industry Insights

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