


As demand grows in the artificial intelligence era, AWS, Microsoft, and Google continue to invest in cloud computing
May 06, 2024 pm 04:22 PMThe growth of the three cloud computing giants shows no sign of slowing down until 2024, with Amazon, Microsoft and Google all generating more revenue in cloud computing than ever before many.
These three cloud vendors recently reported earnings, and they all continued their multi-year strategies of sustained revenue growth. On April 25, both Google and Microsoft announced their results. In the first quarter of Alphabet's fiscal year 2024, Google Cloud's revenue was US$9.57 billion, a year-on-year increase of 28%. Microsoft's cloud revenue was $35.1 billion, a year-over-year increase of 23%.
On April 30, Amazon Web Services (AWS) reported that its revenue was US$25 billion, a year-on-year increase of 17%, ranking among the three giants. Cloud providers have a lot to be happy about, with all three market leaders seeing significant improvements in their growth rates over the past two quarters. Looking forward, the cloud computing market is predicted to continue to maintain strong annual growth rates and the market size will double within four years.
Microsoft Azure grows on big deals
Similarly last year, artificial intelligence (AI) was the main driver of growth for the three major cloud providers. While artificial intelligence has triggered new demands for cloud computing, it has also brought more customer transactions to Microsoft.
Overall, the number of large deals on Azure from various industry leaders is accelerating, including multi-billion dollar-plus multi-year commitments announced by Cloud Software Group and The Coca-Cola Company [in April]. The number of Azure deals worth more than $1 billion increased by more than 80% year-over-year, while the number of deals worth more than $10 million more than doubled.
Google continues to push the next step in cloud computing
During Alphabet’s earnings call, CEO Sundar Pichai repeatedly talked about the ability of AI to drive the development of cloud computing. In addition, Google Cloud has recently launched a series of new features and services.
In the cloud, more than 1,000 new products and features have been released. At Google Cloud Next, more than 300 customers and partners talked about their successful experiences using Google Cloud to implement generation functions, including global brands such as Bayer, Zindaz, Mercedes-Benz, and Walmart.
Cost optimization is no longer the main driver of cloud computing
At AWS, senior administrators have been saying for the past few years that cost optimization is the driving force behind the move to the cloud. But that will no longer be the case in 2024. Companies have largely completed most of their cost optimization efforts and are turning their attention to new initiatives.
Before the outbreak, companies were working hard to modernize their infrastructure and move from on-premises infrastructure to the cloud to save costs. The subsequent epidemic and uncertain economic situation distracted this strategic trend, but it is picking up again, and companies are pursuing this relatively easy-to-achieve infrastructure modernization.
Continued demand also drives the need for AWS to invest more money in building data centers and additional capabilities. Re-accelerating AWS growth and high demand for genAI are expected to drive a significant year-over-year increase in capex in 2024, which is a positive sign for future growth given how the AWS business model works. The greater the demand for AWS, the more we need to purchase new data centers, power, and hardware.
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