Cloud computing drives colossal growth for top tech players
THE TECH GIANTS OF THE WORLD Microsoft, Amazon, Google and Intel posted their stellar quarterly earnings last week, and what was notable was evidence that their investments into cloud computing technology are paying off.
Microsoft’s Azure business has nearly doubled, with a year-on-year growth of 90 percent. Though the company has not released official revenue figures for Azure, the research firm Canalys estimated that the cloud computing business has generated US$2 billion for Microsoft.
The main highlight for Microsoft in the quarter was securing a deal with retailer, Costco. The deal came just two months after the closure of Amazon’s acquisition of grocery chain Whole Foods. The closure has been said to have heightened unease among many retail and e-commerce companies with regards to working with Amazon, said Ed Anderson, an analyst with Gartner.
Despite the speculation, Amazon Web Services (AWS) is still delivering significantly more revenue than any of its industry peers. For the quarter, AWS have raked in almost US$4.6 billion, with a year-on-year increase of 42 percent.
Though the company has lost Costco to rival Microsoft, they most certainly won’t be weeping. The company has sealed big deals with the likes of General Electric, Hulu, and Toyota Racing Development.
Another company securing deals with big industry names is Google Cloud Platform (GCP). The company provides cloud services to the likes of department store retailer Kohl’s and payments processor PayPal.
Like Microsoft, the company has held back from detailing revenue, but Canalys estimates GCP generated US$870 million in the quarter, a value up 76 percent year-on-year.
Sundar Pichai, CEO of Google, told ARN that GCP is a top-three priority for the company, with Google planning to continue expanding its cloud sales force.
Research firm Canalys estimates the cloud computing market at US$14.4 billion for the third quarter of 2017, up 43 percent from the previous year.
— Canalys (@Canalys) October 27, 2017
According to estimates by Canalys, Amazon holds 31.8 percent of the market, with Microsoft behind at 13.9 percent, followed by Google with six percent.
“The cloud market will keep growing faster than most of the traditional information technology segment, as the market is still in the developing stage,” said Daniel Liu, a Canalys research analyst, to ARN.
The strongest cloud service performer and company reflecting the overall growth in the market was Intel. Intel sell processors and chips to cloud vendors, and in July, launched its new “Xeon Scalable Processors”. This launch drove 7 percent year-on-year growth for the company’s data center group.
Despite the surge in success for cloud services, some analysts expect it to slow over time as competition increases.
“Going forward, cloud services will become more of a commodity, and the prices will quickly compress,” said Adam Sarhan, CEO of 50 Park Investments, an investment advisory service.
“For now though, it’s a great business with plenty of room for all to grow.”
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