Cloud Wars logo, showcasing analysis of COVID-19 impact on cloud growth
Cloud Wars logo, showcasing analysis of COVID-19 impact on cloud growth

Will COVID-19 Tank Cloud Revenue for Microsoft, Amazon, Google, IBM?

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How hard will the COVID-19 crisis hit the cloud growth rates of six Cloud Wars Top 10 vendors with Q1 earnings coming out soon: #1 Microsoft, #2 Amazon, #4 Google, #5 SAP, #7 IBM, and #9 ServiceNow?

Cloud Wars

Top 10 Rankings — Apr. 13, 2020

1. Microsoft — Bogus “775% surge” went from fake news to lame fix—very surprising
2. Amazon — Big donation of services to researchers for current and future crises
3. Salesforce — Benioff was first tech CEO to speak forcefully about COVID-19
4. Google — Kurian shares a massive, wide-ranging global response to COVID-19
5. SAP — co-CEOs’ message to global community: ‘Together we will persevere’
6. Oracle — Giving Gen 2 IaaS GPU services to COVID-19 research teams
7. IBM — Will new CEO shake things up or simply shuffle the pieces?
8. Workday — Bhusri doubles down on commitment to employees as crisis intensifies
9. ServiceNow — Its 4 free emergency-response apps now used by 1,000+ entities
10. Adobe — Digital Experience business up 24% to $859M in Q4

We got a sense of the slowdown’s severity last week when SAP released its preliminary Q1 numbers. Those results showed that while cloud revenue grew a very respectable 29%, license revenue fell 31%. SAP said business was very solid in January and February, but that many customers pulled back in March as the world began to understand the magnitude of the COVID-19 pandemic. SAP will release final Q1 numbers of April 21.

So let’s take a look at the other 5 vendors in the Cloud Wars Top 10 and try to get an idea of what their Q1 numbers might look like. In each case, I’ll give three numbers: quarterly cloud revenue from the same period a year ago, quarterly cloud revenue from the previous quarter, and my projected cloud revenue for the 3 months ended March 31.

#1 Microsoft (earnings date April 29)

(Microsoft’s fiscal year ends June 30 so this most-recent 3 months was its fiscal Q3.)

  • Year-ago quarter cloud revenue and growth rate: $9.6 billion, up 43%
  • Previous quarter cloud revenue and growth rate: $12.5 billion, up 41%
  • My projection for their fiscal Q3 2020 cloud revenue and growth rate: $12.7 billion, up 32%
#2 Amazon (earnings date April 30)
  • Q1 2019 cloud revenue and growth rate for AWS: $7.7 billion, up 42%
  • Q4 2019 cloud revenue and growth rate for AWS: $9.95 billion, up 34%
  • My projection for Q1 2020 cloud revenue and growth rate for AWS: $9.93 billion, up 29%
#4 Google (earnings date April 28)
  • Q1 2019 cloud revenue and growth rate for Google Cloud: not released, but my estimate is $1.85 billion
  • Q4 2019 cloud revenue and growth rate for Google Cloud: $2.61 billion, up 53%
  • My projection for Q1 2020 cloud revenue and growth rate for GoogleCloud: $2.55 billion, up 38%, based on my estimate of Q1 2019 revenue of $1.85 billion
#7 IBM (earnings date April 20)
  • Q1 2019 cloud revenue and growth rate: $4.4 billion
  • Q4 2019 cloud revenue and growth rate, including Red Hat: $6.8 billion, up 23%
  • My projection for Q1 2020 cloud  revenue, including Red Hat: $6.1 billion
#9 ServiceNow (earnings date April 29)
  • Q1 2019 subscription revenue and growth rate: $760 million, up 40%
  • Q4 2019 subscription revenue and growth rate: $899 million, up 36%
  • My projection for Q1 2020 subscription revenue and growth rate: $988 million, up 30%

As the actual numbers come out over the next couple of weeks, we’ll keep you up to date on all the details and related analysis. Until then, stay safe and healthy.

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