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Race to the cloud: Microsoft and IBM beat AWS, Google becomes $1B cloud company, while Alibaba enters top 5 cloud vendors list   

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Most of the top cloud service providers recently released their revenues for the final quarter of 2017 that ended 31st December. The cloud business drove results for many leading tech companies including Amazon and Microsoft. The top 5 cloud providers dominate almost three-fourth of the total cloud market.

The final quarter data shows that expenditure on cloud infrastructure has rapidly grown throughout the year, especially in the last 3 months of 2017. Major portion of the cloud growth was driven by Amazon Web Services (AWS), Microsoft Azure, Google Cloud, IBM Cloud, and Alibaba Cloud.

AWS maintained its dominance in the public cloud market, posting a revenue of $5.1 billion in fourth quarter, an increase of around 45% from the same quarter last year. AWS released around 500 new services and features during the quarter, thanks to its re:Invent conference that took place in the same quarter. AWS generated revenue of $17.5 billion in 2017.

Microsoft Azure’s quarter revenues grew 56% from the final quarter 2016, and reached $5.3 billion. As of the full year revenue, Azure touched $18.6 billion in 2017. While AWS still dominates the public cloud market, Microsoft cloud is growing faster than AWS.

“This quarter’s results speak to the differentiated value we are delivering to customers across our productivity solutions and as the hybrid cloud provider of choice,” said Satya Nadella, CEO of Microsoft. “Our investments in IoT, data, and AI services across cloud and the edge position us to further accelerate growth.”

Under the guidance of Satya Nadella, whose leadership style is all about encouraging a ‘growth mindset’, Microsoft has been reborn.

Meanwhile, IBM maintained its rank in the list of top cloud service providers as the third largest cloud provider.

But there is a surprise! Which cloud vendor posted the highest revenue in final quarter of 2017? IBM won the crown with $5.5 billion, spurred by a growth rate of 30%.

IBM Cloud’s full year revenue results were pretty close to that of AWS─ $17 billion.

Google is becoming a serious player in the enterprise cloud market. It set out a bit late in the cloud race, but it’s a company whose name has become a verb, and can’t be counted out.

Sundar Pichai, CEO of Google, told investors that Google Cloud had become a $1 billion per quarter business, at the end of final quarter. This meant that cloud unit held only 3% of the total revenue of Google. Most of the revenue of Google came from advertising sales, which accounted for $27 billion in the just-ended quarter. The total estimated revenue of Google Cloud in 2017 was $3 billion.

Google’s cloud business includes revenues from its popular G-Suite productivity service, as well as the cloud infrastructure services.

However, the cloud results worth noting, were those of Alibaba Cloud, who showed a growth rate of 104%, reaching $553 million at the end of the final quarter, from just $280 million in the last quarter of 2016. The doubling in cloud revenue helped Alibaba Cloud to join the list of top 5 cloud service providers, for the first time.

Alibaba’s cloud revenue is primarily driven by rise in the number of paying customers, and increase in their usage of cloud computing services like database, storage and security services.

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Also read: Top 5 trends that reveal the emergence of cloud-first enterprises

Alibaba is also an e-commerce company like Amazon, and it generated revenue of more than $1 billion from its core commerce. Alibaba said that it launched nearly 400 new products and features, and added AI tools to its portfolio during the quarter.

The other cloud vendors in the top 10 list were Oracle, SAP, and Salesforce.

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