AWS, Microsoft, and Google Cloud Continue Strong Performance With Combined Q2 Sales of USD $65B
The heavyweights are at it again.
Amazon Web Services (AWS) Microsoft Azure, and Google Cloud, who combined comprise the lion’s share of the USD $600 billion or so cloud market, are continuing to rake in gazillions of dollars, combining for USD $65 billion in total sales in the second quarter of 2024 alone. Microsoft, perhaps unsurprisingly, leads the way, with USD $28.5 billion in total sales from April to June, followed by AWS’s USD $26.3 billion and Google Cloud’s USD $10.3 billion.
These figures put Microsoft, AWS, and Google Cloud—collectively referred to as the Big 3 of cloud—on pace to register revenues of USD $114 billion, USD $105.2 billion, and USD $41.2 billion, respectively, by the end of this year assuming they maintain this industry-leading performance for the rest of 2024. That seems moot by now given the dominance of the world’s top three hyperscalers, whose vice grip on the cloud market remains unchallenged at a combined 67%—32% for AWS, 23% for Microsoft, and 12% for Google Cloud.
“Our strong performance this fiscal year speaks both to our innovation and to the trust customers continue to place in Microsoft,” said Satya Nadella, CEO at Microsoft. “As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today while also ensuring we lead the AI (Artificial Intelligence) era.”
Better Cloud Performance Compared to Last Year
Indeed, Microsoft performed exceptionally well in Q2, where sales grew by 21% compared to the same period last year. AWS, on the other hand, saw sales grow by 19% year-on-year (YoY), while Google Cloud made the biggest leap in terms of YoY sales growth at 29%—bumped up no doubt by the slight increase in its overall market share and the company’s aggressive push for AI.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in the cloud,” noted Sundar Pichai, CEO at Google. “We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”
It appears all of the Big 3 have gained considerable momentum, with their sky-high Q2 revenue translating to fat operating incomes for each of Microsoft Intelligent Group (USD $12.9 billion), AWS (USD $9.3 billion), and Google Cloud (USD $1.2 billion). This means AWS nearly doubled its USD $5.4 billion operating income from last year in the same period, while Microsoft Intelligent Group’s grew by USD $2.4 billion YoY from last year’s USD $10.5 billion. Google Cloud, on the other hand, more than doubled its USD $395 million operating income in Q2 of last year as it joined its Big 3 brethren in breaching the billion-dollar mark in this respect.
Cloud Market Set to Expand, Big 3 Dominance to Be Unchallenged?
This strong momentum looks poised to continue, with the global computing market forecast to grow at a CAGR of 15.1% until 2028, when that market is predicted to hit the USD $1.26 trillion mark. North America, unsurprisingly, is expected to command the largest market share globally, followed by Europe and then Asia, where India, China, and the Asia-Pacific region are forecast to present lucrative opportunities for cloud providers big and small.
The Big 3, though, will probably still lead the cloud market in the years ahead given their already prime standing as the world’s top three hyperscalers—AWS, Microsoft, and Google have been 1-2-3 in terms of cloud market share since 2018—and their massive cloud investments. The only question now for the time being is whether or not Microsoft and Google Cloud can further close in on AWS.
