Cloud Hyperscaler Commentary for Q1 2021

Suffice to say cloud infrastructure is doing just fine

This week we got a lot of news out of the “Cloud Hyperscalers” on how Q1 2021 looks for cloud infrastructure and forecasts for the future. The commentary from GCP, AWS, and Azure is frankly stunning and warrants a quick post on it alone. I’ve outlined some relevant commentary from each IaaS cloud vendor below.

AWS - $13.5B Q1 revenue, 32% YoY growth

We continue to expand our AWS infrastructure footprint to support the strong growth we're seeing. AWS offers 80 availability zones across 25 geographic regions around the world. And we've announced plans to launch 15 more availability zones in 5 more regions.

Usually a good sign of sustained customer demand when an already huge company continues its frenetic pace of infrastructure expansion without any signs of slowing down.

This year, we're up to a $54 billion annualized run rate, which is, while also a 32% year-over-year growth, it added $13 billion of revenue in the last 12 months as opposed to $10 billion prior -- $10 billion in the prior 12 months before that. So the percentages can be a little deceiving.

$13B of revenue added in the last 12 months. Sometimes we all focus too much on percentages rather than absolute scale. That is freaking absurd growth.

And then really, we also have less downtime and better security, which I think is super important to all of our customers, especially security nowadays.

AWS US-East 1 hasn’t crashed the internet in awhile and management is suggesting that is driving even more continued customer growth and usage. Resilience and speed are best in class features at scale.

GCP - ~$2-3B Q1 revenue, growing 60% YoY ? (estimate)

[Google Cloud] Q1 revenue grew 46% year-over-year, with GCP's revenue growth rate once again meaningfully about cloud overall.

Google Cloud reported $4B in Q1 revenue of which GCP is the faster growing component. $2-3B of revenue is an amazing accomplishment for any business. Just incredible that AWS is still adding more than GCP’s total quarterly rev to their base still.

In cloud, There are 3 distinct market trends shaping our growth and driving our product and go-to-market strategy. First, we see very strong customer momentum in the data cloud [particularly BigQuery]… Second, we are seeing customers wanting a robust infrastructure cloud in order to create operational efficiencies and reduce IT costs. Multicloud remains a differentiator as it provides the easiest and most open development environment for customers like Taylor's, allowing them to access and move their data between various clouds.

Data continues to be what GCP sees as their biggest edge along with cost savings from a lower priced product and pitching multicloud portability. Google Anthos has been a selling point to be able to run things like BigQuery on whatever cloud infra you want.

This is why you see us work hard on TPUs, and we think about the tool chain for developers on top of all that…it's why I feel Google GCP will be differentiated over time as our competitive advantage plays out.

Further reinforcement from management that GCP differentiates on data and ML.

Azure - ~$7B Q1 Revenue, Growing 50% YoY

Now I'll highlight our growing opportunity and momentum, starting with Azure. As the world's COGS become more digital, computing will become more ubiquitous and decentralized. We are building Azure to address organizations' needs in a multi-cloud, multi-edge world. We have more data center regions than any other provider, including new regions in China, Indonesia, Malaysia as well as United States.

Satya Nadella is a freaking amazing communicator. “The world’s COGS become more digital” is such a powerful and easy to understand way to address market TAM. Also, love the AWS jab with the most data center regions.

Azure has always been hybrid by design, and we are accelerating our innovation to meet customers where they are. Azure Arc extends the Azure control plane across on-premise, multi-cloud and the edge and going further with Arc-enabled machine learning and Arc-enabled Kubernetes.

GCP stresses data and AI, AWS stresses scale and number of services, and Azure stresses hybrid cloud to be able to easily shift workloads between on-prem, multi-cloud, and VPCs.

We are leading in hyperscale SQL and non-SQL databases to support the increasing volume, variety and velocity of data. Customers continue to choose Azure for their relational database workloads with SQL Server on Azure VMs use up 129% year-over- year. And Cosmos DB is the database of choice for cloud-native app development at any scale.

Interesting database statistics. Strength in SQL Server is particularly interesting and also highlights Azure’s hybrid strength.

Conclusion

The major IaaS cloud vendors are continuing to aggressively add capacity and invest in future growth which shows no signs of slowing. They are all trying to show differentiation to customers in various ways with AWS pitching the best end to end platform, GCP focusing on Data & ML, and Azure focusing on workflow portability with hybrid features. The best part of this is each customer can pick for each business unit what is the best option to help the business achieve their desired outcomes.