The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
These three massive technology conglomerates have been leading the global public cloud and cloud services market for years now, while also battling each other for market leadership.
Gartner projects that total end-user worldwide spending on public cloud services will hit a record $592 billion in 2023, which would represent a 21% increase compared to $490 billion in 2022.
"Cloud migration is not stopping," said Sid Nag, vice president and analyst at Gartner. "Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature."
AWS, Google Cloud, Microsoft earnings
All three companies ended quarters on 30th September 2022.
That represented Amazon and Google's third quarter for the year, while the three months from July to September represented Microsoft's first fiscal quarter of 2023.
Amazon Web Services (AWS) is Amazon's cloud business, led by CEO Adam Selipsky, while Google Cloud is Google's flagship cloud group, run by CEO Thomas Kurian.
It is key to note that Microsoft doesn't break out its cloud business as a standalone business group and has yet to provides exact dollar figures for its flagship Azure cloud offering. Instead, Microsoft wraps Azure and other cloud services inside the company's 'Intelligent Cloud' segment.
Microsoft CEO Satya Nadella and Google CEO Sundar Pichai were both bullish about their companies' futures in cloud computing during their earnings report with media and analysts last month as the market continues to expand. Amazon's new CEO Andy Jassy did not attend the Amazon's recent earnings report.
Here we are breaking down AWS, Google Cloud and Microsoft's cloud financial results around total revenue, sales growth, operating income and overall worldwide cloud market share for the third quarter 2022, as well as what each company's leaders had to say about their cloud results.
The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
Total sales
AWS: $20.5 Billion
Microsoft: $20.3 Billion
Google Cloud: $6.9 Billion
When it comes to total cloud revenue, AWS is still the market leader.
The Seattle-based cloud giant generated $20.5 billion in sales during the quarter, up from $16.1 billion year over year.
Microsoft approached the long-time market leader, although because it doesn't break Azure our as a separate unit - instead wrapping it other cloud services sales inside the 'Intelligent Cloud' segment - a direct comparison isn't possible. The Intelligent Cloud segment generated $20.3 billion in revenue during the quarter, up from $16.9 billion one year ago.
Mountain View, Calif.-based Google Cloud generated total sales of $6.9 billion for the quarter, up from $5 billion in third quarter 2021.
The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
Annual cloud growth rate
Google Cloud: 38%
AWS: 27%
Microsoft: 20%
Google Cloud has been witnessing massive cloud growth over the past several years, and increased its revenue by a whopping 38% in Q3, with total sales of $6.9 billion.
AWS increased its revenue by 27% YoY, on revenue of $20.5 billion in the third quarter.
Revenue from Microsoft's Intelligent Cloud grew 20% YoY to $20.3 billion. The company said overall growth included a 35% increase in Azure and other cloud services sales. Microsoft does not provide exact Azure sales figures.
The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
Operating income
Microsoft: $9 Billion
AWS: $5.4 Billion
Google Cloud: Loss of $699 Million
Operating income from Microsoft's Intelligent Cloud segment reached approximately $9 billion during its first fiscal quarter 2023, up from $7.7 billion compared to the same period last year.
AWS' operating income reached $5.4 billion during the quarter, up from $4.9 billion last year.
Google Cloud has yet to generate a profit. The company's operating income for the quarter was a loss of $699 million.
That said, the third-quarter loss is less than the operating loss Google Cloud has had in prior quarters. In Q2'22, Google Cloud reported an operating loss of $858 million, and $931 million in Q1'22.
"We do continue to invest meaningfully in [Google Cloud]," said Google's chief financial officer Ruth Porat during the company's earnings report last month. "We're still focused very much so on the path to profitability and free cash flow strength here. But we are continuing to invest in the business."
The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
Q3 2022 cloud services market share
AWS: 34%
Microsoft: 21%
Google: 11%
AWS continues its reign as the global market share leader in cloud services, according to third quarter 2022 data from market research firm Synergy Research Group.
AWS won 34% share of the worldwide cloud services market share in Q3'22, up from 33% one year ago.
Microsoft captured a 21% share, up from 20% last year - although it does notably have a lead over AWS in the UK.
Google Cloud took an 11% share of the worldwide cloud market, up from 10% last year.
Worldwide enterprise spending on cloud infrastructure services reached $57.5 billion in the third quarter of 2022, representing a 24% increase in year-over-year revenue growth, according to Synergy Research Group.
AWS, Microsoft and Google combined held a 66% revenue share of the total cloud services market.
"Beyond these three, all other cloud providers, in aggregate, have been losing around three percentage points of market share per year but are still seeing strong double-digit revenue growth," said John Dinsdale, a chief analyst at Synergy Research Group.
Synergy's research includes worldwide cloud spending on Infrastructure as-a-Service (IaaS), Platform as-a-Service (PaaS) and hosted private cloud services.
The earnings battle: AWS vs Microsoft vs Google Cloud, Q3'22
Wider tech is struggling, but cloud keeps growing
The three largest cloud providers in the world — Amazon Web Services, Google and Microsoft — have all released their financial earnings for the quarter spanning from July to September.
Bold cloud statements from leaders
Microsoft CEO Satya Nadella, Google CEO Sundar Pichai, and Amazon CFO Brian Olsavsky were all bullish about the cloud opportunities ahead.
"The long-term trends that are driving cloud adoption continue to play an even stronger role during uncertain macroeconomic times," said Google's Pichai during its earnings report. "Google Cloud helps customers solve today's business challenges, improve productivity, reduce costs and unlock new growth engines.
"Customers partner with Google Cloud because we offer a single platform that can analyse data across any cloud."
Microsoft's Nadella said his company's cloud strategy is helping organisations "do more with less today."
"It helps them align their spend with demand and mitigate risk around increasing energy costs and supply chain constraints. We're also seeing more customers turn to us to build and innovate with infrastructure they already have."
Amazon's Olsavsky said AWS is a top priority for Amazon, where the company will continue to invest heavily.
"We continue to ramp up our investments in AWS, adding product builders and sales and professional services headcount to help customers save money, invent more quickly in their businesses and transition to the cloud," he said. "The breadth and depth of our service offerings enable us to help them do things like move storage to lower-priced tiers options and shift workloads to our Graviton chips."