Amazon (AWS) Vs. Microsoft (Azure) Vs. Google: How Cloud Revenues Stacked Up In Q4

The big three cloud vendors outperformed the Big Techs this reporting season. Here's a look at how their cloud businesses fared in the quarter.

Cloud Spending Buoyant In Q4: Worldwide cloud infrastructure services spending topped $50 billion in a quarter for the first time in the fourth quarter of 2021, research firm Canalys said in a report.

Total spending grew 34% year-over-year to $53.5 billion, the firm said. 

Diversification of industry-specific applications, and increased workload migration and cloud-native application development increased the demand for cloud services.

AWS Vs. Azure Vs. Google Cloud: Amazon, Inc. AMZN led the cloud infrastructure services market and collected 33% of the total spending, Canalys data showed.

Amazon revealed in its quarterly report that AWS sales climbed 39.5% to $17.78 billion and the business contributed about 13% to the e-commerce giant's total revenues. AWS' annual revenue run-rate was $62.2 billion in 2021.

Microsoft Corporation MSFT said its Intelligent Cloud business, comprising Azure public cloud, GitHub and server products, turned in revenues of $18.33 billion, up 25.5% year-over-year.

Azure and other cloud services revenues climbed 46%, decelerating from the 50%-plus growth in the last four quarters.

Alphabet, Inc.'s GOOG GOOGL Google Cloud Revenues jumped nearly 44.6% to $5.54 billion.

On the operating level, AWS contributed $5.293 billion to Amazon's operating profit. Microsoft's operating profit from its Intelligent Cloud business, which includes Azure, was $8.2 billion. Google's Cloud business, however, registered a loss of $890 million on the operating level.

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In terms of absolute dollar contribution, Amazon stands towering tall over the its cloud peers, while Microsoft takes the honors of having the highest year-over-year growth.

Amazon's AWS helped the company offset the core e-commerce business' operating loss, while Microsoft's Intelligent Cloud business accounted for roughly 37% of the company's total operating income.

Google's cloud business continued to bleed. The company is apparently unworried. 

"While cloud operating loss and operating margin improved in 2021, we plan to continue to invest aggressively in cloud given the sizable market opportunity we see. We do remain focused on the longer-term path to profitability and over time, operating loss and operating margin should benefit from increased scale," Ruth Porat, Alphabet's CFO, said on the earnings call.

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Looking ahead, the cloud sector is likely to be key for all three companies.

Microsoft said it expects Intelligent Cloud revenues to be between $18.75 billion and $19 billion in the March quarter, driven by the momentum in Azure. Commercial bookings grew 32% and 37% in constant currency, significantly ahead of expectations, driven by the large, long-term Azure contracts, Microsoft CEO Amy Hood said on the company's second-quarter earnings call.

At last check, Amazon shares were rallying 15.44% to $3,205, Microsoft was adding 2.39% to $308.44 and Alphabet Class A shares were edging up 1.15% to $2,894. 

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