The Big Three reversed last year's decline: Amazon AWS revenue increased 17% year over year in the first quarter, while Microsoft Azure and Google Cloud grew 31% and 28% respectively, all exceeding market expectations.
Thanks to the huge enthusiasm of enterprise customers for artificial intelligence, America's top three cloud giants —$Amazon (AMZN.US)$,$Microsoft (MSFT.US)$,$Alphabet-C (GOOG.US)$——The performance of the cloud computing division exploded in the first quarter, injecting a dose of strength into weak Wall Street investors.
Amazon, which was the last of the Big Three to announce financial reports, saw a 17% year-on-year increase in revenue for its cloud computing division in the first quarter, exceeding Wall Street expectations of 15%, and accelerated growth for two consecutive quarters.
Thanks to strong cloud revenue, Amazon achieved an annual revenue scale of 100 billion US dollars for the first time.
Microsoft Azure and Google Cloud also performed well. Revenue achieved year-on-year growth rates of 31% and 28% respectively in the first quarter, both exceeding market expectations.
Over the past few years, the growth rate of cloud infrastructure vendors was as high as 60%. Demand for cloud computing has risen sharply as more businesses have switched to online operations during the pandemic. However, despite the deteriorating business environment, these companies had to readjust their budgets and cut cloud computing spending last year.
Today, the Amazon, Microsoft, and Google cloud computing divisions all achieved strong growth in the first quarter, sending a positive signal to the $270 billion cloud computing industry. Executives and analysts say companies have now begun to recover spending on cloud computing.
Gil Luria, an analyst at D.A. Davidson & Co, said, “Judging from the performance of AWS, Microsoft Azure, and Google Cloud, it's clear that two things are happening at the same time — artificial intelligence is driving growth, and other areas of cloud spending are also growing faster.”
Microsoft CEO Satya Nadella said on the first quarter earnings call: “The number of Azure AI customers continues to grow, and average spending continues to rise.” He also said that more than 65% of Fortune 500 companies are customers of Azure OpenAI services.
Financial reports show that artificial intelligence services contributed 7 percentage points to Azure's growth in the first quarter, up from 6 percentage points in the previous quarter.
Alphabet CEO Sundar Pichai said in the first quarter earnings call that more than 60% of AI startups and nearly 90% of AI unicorns were using Google Cloud when they were fully funded.
“Unavoidably, workloads continue to migrate to the cloud, and IT spending continues to be concentrated on large platforms, including hyperscale providers,” said Rishi Jaluria, an analyst at RBC Capital Markets.
Editor/Somer