The three largest cloud companies on the planet—Amazon Web Services, Google Cloud and Microsoft—have now all reported their quarterly financial earnings for the second quarter of 2023. The three tech giants generated a total of roughly US$54 billion in cloud sales combined during the second quarter.
AWS reported its slowest sales growth rate in years, while Google Cloud generated its highest operating income in its history.
“Our AWS growth stabilised as customers started shifting from cost optimisation to new workload deployment,” said Amazon chief executive Andy Jassy during the company’s second-quarter 2023 earnings report Thursday.
Combined, AWS, Google and Microsoft own 65 per cent of the worldwide cloud services market in second-quarter 2023, according to brand- new cloud market-share numbers from Synergy Research Group.
CRN provides a side-by-side comparison of each company’s: total revenue, operating income, sales growth rates, parent company results and new second-quarter cloud market-share standings.
AWS, Microsoft and Google’s Q2 2023 cloud market share
Before jumping into Google, Microsoft and AWS’ earnings and market-share data, it is key to note that the entire cloud infrastructure services market increased by US$10 billion in second-quarter 2023 year over year.
Worldwide spending on enterprise cloud infrastructure services reached nearly US$65 billion in the second quarter, representing a growth rate of 18 per cent, or US$10 billion year over year.
Although the current economic climate has affected growth in cloud spending, Synergy Research Group said the market continues to expand at a healthy rate despite short-term challenges.
“We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend and driving operating leverage,” said Microsoft Chairman and chief executive Satya Nadella during his company’s quarterly earnings report last week.
Google and Amazon unveiled their Q2 2023 earnings results, which ended June 20, 2023. In the same three-month span, it represented Microsoft’s fourth fiscal quarter 2023.
CRN breaks down the five biggest revenue, income, growth and new market-share numbers that every AWS, Microsoft and Google Cloud partner, customer and investor should know.
Q2 total revenue/annual run rate
- AWS: US$22.1 billion/US$88 billion
- Google Cloud: US$8.03 billion/US$32 billion
- Microsoft: US$24 billion/US$96 billion
AWS captured total revenue of US$22.1 billion in second-quarter 2023.
The cloud computing pioneer now has an annual run rate of more than US$88 billion.
Google Cloud generated total revenue of US$8.03 billion in second-quarter 2023, besting Wall Street’s sales projection of approximately US$7.8 billion.
The company now has an annual run rate of approximately US$32 billion, the largest in Google Cloud’s history.
Microsoft does not provide to the public its Azure sales figures.
Instead, Microsoft combines Azure, server product and other cloud services revenue all under its Microsoft’s Intelligent Cloud umbrella.
The company’s Intelligent Cloud group generated US$24 billion in revenue during its fourth fiscal quarter 2023.
This means Microsoft’s Intelligent Cloud group has an annual run rate of US$96 billion.
Sales growth
- Google Cloud: 28 per cent
- Microsoft: 15 per cent
- AWS: 12 per cent
Google Cloud’s just over US$8 billion in revenue generated in second-quarter 2023 represented a year-over-year growth rate of 28 per cent.
This was the highest sales growth rate increase out of the three cloud companies.
In first-quarter 2023, Google Cloud reported a similar 28 per cent sales growth rate year over year on revenue of US$7.45 billion.
It is key to note, again, that Microsoft doesn’t provider Azure sales figures by themselves.
Azure revenue is counted as part of Microsoft’s Intelligent Cloud group.
The company’s Intelligent Cloud group reported a 15 per cent sales increase year over year on total sales of US$24 billion for its fourth fiscal quarter 2023.
During third-quarter 2023, Microsoft’s Intelligent Cloud group increased sales by 16 per cent year over year.
AWS reported one of its lowest sales growth rates in the company’s history during second-quarter 2023. AWS’ US$22.1 billion in sales represented 12 per cent year-over-year sales growth.
Comparatively, during AWS’ second-quarter 2022, the company increased sales by 33 per cent year over year.
Operating income
- Microsoft: US$10.5 billion
- AWS: US$5.4 billion
- Google Cloud: US$395 million
Microsoft’s Intelligent Cloud group reported operating income of US$10.5 billion during the quarter, up US$1.7 billion, or 20 per cent year over year.
Gross margin increased 16 per cent year over year, or by US$2.3 billion, according to Microsoft, driven by growth in Azure and other cloud services.
AWS captured operating income of US$5.4 billion in second-quarter 2023, representing a 6 per cent decline year over year compared with US$5.7 billion.
The drop was due to a roughly US$2.7 billion increase year over year in operating expenses for AWS during second-quarter 2023.
Google Cloud generated operating income of US$395 million in second-quarter 2023.
In the same quarter one year ago, Google Cloud reported an operating loss of US$590 million.
This means the company improved its operating income by nearly US$1 billion year over year in second-quarter 2023.
Global cloud market share of US$65 billion in Q2 2023
- AWS: 32 per cent
- Microsoft: 22 per cent
- Google Cloud: 11 per cent
Worldwide enterprise spending on cloud infrastructure services reached US$65 billion in second-quarter 2023, up 18 per cent, or US$10 billion, year over year, according to new market-share data released by Synergy Research Group.
AWS is the world’s number one market-share leader for cloud infrastructure services by capturing 32 per cent global share.
Microsoft ranks number two by winning 22 per cent worldwide market share.
Google Cloud placed third by capturing 11 per cent market share.
In aggregate, these three companies accounted for 65 per cent of the global cloud services market in second-quarter 2023.
Looking at Synergy Research Group’s first-quarter 2023 market share numbers, AWS won 32 per cent share, Microsoft captured 23 per cent share and Google Cloud won 10 per cent share.
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