AI Hyperscaler Race: Sprinting — Microsoft, Google, Oracle; Strolling — AWS

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18d ago 6:11

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In today's Cloud Wars Minute, I reveal why AWS’s growth, though strong in isolation, looks sluggish compared to its peers.

Highlights

00:29 — We're seeing a distinct split looking at the Q2 numbers. We've got three sprinters — Microsoft, Google, and Oracle — and we've got one stroller, which is AWS. Now, also, just a quick detail: the first three companies — Microsoft, Google, and AWS — all follow the quarterly calendar pattern.

01:30 — Microsoft in Q1 grew 20% to $42.4 billion. In Q2, that growth shot up from 20% to 27%, revenue for Microsoft Cloud was $46.7 billion. Google: Q1, 28% growth to $12.3 billion. Q2, that growth accelerated from 28% to 32%; revenue reached $13.6 billion. Oracle: 23% growth in what I'm calling Q1 to $6.2 billion. That growth jumped to 27% in its most recent quarter: $6.7 billion.

02:39 — Oracle has guided that its fiscal 2026 RPO — that’ll end May 31 — will grow 100%. So while its cloud revenue currently isn't that big, its RPO is enormous, and its growing very fast there. Now, here's the outlier: AWS. Q1 grew 17% to $29.3 billion. Come over to Q2 — again, it was the slowest growing — 17.5% to almost $31 billion.

03:21 — I think the point to look at here, though, is all four of the companies' growth accelerated from Q1 to Q2. But while the others all showed significant jumps in growth rate Q1 to Q2, Amazon — or AWS — was a modest half-point: from 17 to 17.5%.

04:01 — Taking their total Q2 revenues, who got what chunk? Microsoft: 47%. Google: 13.9%. Oracle: 6.8%. AWS: 31.6%. Who is grabbing more of the new business? Who are customers — right here, right now — signing up with? Look at AWS: 31.6% of the total, but only 20.8% of the new revenue meaning that it is taking less share than its overall size and mass would indicate.

05:19 — Now, AWS — I will say before I close here — it’s perhaps unfair, in the category of, you know, "life's not always fair," that AWS — almost at about a $30 billion scale — grew 17.5%. And in any other industry, at any other time, that would be lauded as absolutely stunning and fantastic. But compared to their competitors, it's not doing as well. So it's a wild time in the Cloud Wars.

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