Google, Amazon and Microsoft may have a ‘spending’ problem
Google, Amazon and Microsoft are the biggest players in the cloud computing market. The industry has seen a boom in digital-first strategy wherein customers are increasingly relying on cloud-based offerings. However, the economic downturn has also had an impact on spending by enterprises.
According to a report by CNBC, these leading cloud vendors said that their clients are looking for ways to trim cloud spending, resulting in slowed revenue growth in the cloud divisions.
AWS saw deceleration in the third and fourth quarters, and last quarter Microsoft finance chief Amy Hood told analysts about a slowdown in December that is expected to persist.
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Amazon revenue hit
In the earnings call last week, Amazon finance chief Brian Olsavsky said that in April, AWS revenue growth had slumped by about five percentage points from the first-quarter growth rate of almost 16%.
According to Amazon CEO Andy Jassy, “What we’re seeing is enterprises continuing to be cautious in their spending in this uncertain time.”
Amazon Web Services‘ year-over-year growth slowed to 16% from 20% in the fourth quarter.
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Google’s growth slowed to 28%
Google witnessed cloud growth slowed to 28% year-over-year in the first quarter from 32% in the prior period. It is to be noted that Google’s cloud segment reached profitability for the first time on record.
“We saw some headwind from slower growth of consumption with customers really looking to optimise their costs given that macro climate,” said Ruth Porat, Alphabet’s finance chief, on the earnings call last week.
Sundar Pichai, Alphabet and Google CEO, said the slowdown is understandable as the company is leaning into optimisation.
“This is an important moment to help our customers, and we take a long-term view. And so it’s definitely an area we are leaning in and trying to help customers make progress on their efficiencies where we can,” Pichai said.
Microsoft’s Hood said that the financial comparisons will soon be against numbers from the point last year when the market was softening.
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Google, Amazon and Microsoft are the biggest players in the cloud computing market. The industry has seen a boom in digital-first strategy wherein customers are increasingly relying on cloud-based offerings. However, the economic downturn has also had an impact on spending by enterprises.
According to a report by CNBC, these leading cloud vendors said that their clients are looking for ways to trim cloud spending, resulting in slowed revenue growth in the cloud divisions.
AWS saw deceleration in the third and fourth quarters, and last quarter Microsoft finance chief Amy Hood told analysts about a slowdown in December that is expected to persist.
Read Also
Amazon revenue hit
In the earnings call last week, Amazon finance chief Brian Olsavsky said that in April, AWS revenue growth had slumped by about five percentage points from the first-quarter growth rate of almost 16%.
According to Amazon CEO Andy Jassy, “What we’re seeing is enterprises continuing to be cautious in their spending in this uncertain time.”
Amazon Web Services‘ year-over-year growth slowed to 16% from 20% in the fourth quarter.
Read Also
Google’s growth slowed to 28%
Google witnessed cloud growth slowed to 28% year-over-year in the first quarter from 32% in the prior period. It is to be noted that Google’s cloud segment reached profitability for the first time on record.
“We saw some headwind from slower growth of consumption with customers really looking to optimise their costs given that macro climate,” said Ruth Porat, Alphabet’s finance chief, on the earnings call last week.
Sundar Pichai, Alphabet and Google CEO, said the slowdown is understandable as the company is leaning into optimisation.
“This is an important moment to help our customers, and we take a long-term view. And so it’s definitely an area we are leaning in and trying to help customers make progress on their efficiencies where we can,” Pichai said.
Microsoft’s Hood said that the financial comparisons will soon be against numbers from the point last year when the market was softening.
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