I must admit I’m having trouble figuring out what people are worried about with regards to Amazon’s competition in the cloud business from Microsoft and Google. Let’s look at some figures that were posted on another board. The percent is an estimate of rate of growth of their cloud business next year. The dollars refer to their 2016 cloud revenue.
AMZN MSFT GOOG 50% 100% 150% $10.0 $2.0 $0.6
Amazon’s cloud grew by 58% in the June quarter and 55% in the Sept quarter. Let’s give them 55% cloud revenue growth next year. Starting from that base of $10.0 billion they would sign $5.5 billion in new cloud business in 2017.
Google, is coming off their tiny base of $0.6 billion, and growing at 150%. That means they will sign all of $0.9 billion in new cloud business in 2017, roughly about 16% as much new cloud business as Amazon. Does that sound like they are catching up to Amazon? Who is signing most of the new cloud business? Amazon is signing six times as much new cloud business as Google! Who is dominating this market?
And Microsoft, coming off a base of 2.0 billion, and growing at 100%, will add $2.0 billion in new cloud business in 2017. That’s about 36% as much new cloud business as Amazon. Does that sound like they are catching up to Amazon? Amazon is signing almost three times as much new cloud business as Microsoft! Who is dominating this market?
And that’s assuming Google will actually grow at 150% (which is, you’ll have to admit, a stretch), and that Microsoft will actually grow at 100%, and that Amazon will actually grow at 55%, which they may not (but if they “only” grow at 50% it won’t change the thesis at all, just the details).
Just my thoughts…