After making some predictions last month about Q2 growth rates and revenue numbers for several Cloud Wars Top 10 companies, I had to share my projected numbers versus actual results so you can decide if there I have no clue about what’s going on in the biggest growth market the world knows.
Here are the results, comparing my predictions in columns 2 and 3 versus the actual results in columns 4 and 5:
|
company |
Expected Q2 Cloud Growth |
Expected Q2 Cloud Revenue |
Actual Q2 Cloud Growth |
Actual Q2 Cloud Revenue |
|---|---|---|---|---|
|
Microsoft |
29% |
$25.2 Billion |
28% |
$25 Billion |
|
AWS |
33% |
$19.7 Billion |
33% |
$19.7 Billion |
|
Google Cloud |
39% |
$6.43 Billion |
36% |
$6.3 Billion |
|
SAP |
24% |
$3.13 Billion |
34% (24%cc) |
$3.12 Billion |
|
Service Today |
26% |
$1.68 Billion |
25% |
$1.66 Billion |
|
IBM |
17% |
————- |
18% |
$5.9 Billion |
Let’s look at each company. The point is not so much to rehash the past — I mean, the numbers are there for the world to see — but rather to get a sense of future momentum in this extraordinary market.
#1 Microsoft (#1 in Cloud Wars Top 10)
The strong dollar dragged down Microsoft’s commercial cloud growth rate, which in constant currency was a healthy 33%. I point this out not to try to downplay the fact but rather to show the high-level impact of the ongoing dynamics of foreign-currency exchange. The company said it will monitor costs more closely than usual, but also said major customers are signing up for cloud deals that are both larger in dollar volume and longer in duration.
As for my prediction versus reality, I’m pretty happy with my call to Microsoft.
#2 AWS
The Amazon cloud powerhouse continues to put up outstanding numbers under CEO Adam Selipsky, who has been running the AWS show for about 15 months.
As for my guess, well, everyone gets lucky from time to time, I guess….
#3 Google Cloud
Dropping below 40% growth for the first time since parent Alphabet began crunching Google Cloud numbers about 18 months ago, Thomas Kurian’s company still posted very strong number and still holds its coveted spot — at least until Oracle reports its fiscal Q1 results in about 4 weeks — as the world’s hottest major cloud provider.
In my forecast, I expected Google Cloud to drop to 40% growth but clearly my expectations were not set appropriately.
#5 SAP
This one is a bit tricky because since SAP is based in Germany, it doesn’t face the severe foreign-currency headwinds that US-based companies do. That’s why I included both its formal growth rate of 34% but also the constant currency growth rate of 24%, which SAP executives referred to several times in the company’s earnings call.
So, I believe my Q2 predictions for SAP hold up well.
#7 Service Today
CEO Bill McDermott was his usual forceful self throughout ServiceNow’s Q2 earnings call as well as in a 1:1 call with me afterward. While ServiceNow hasn’t hit its typical growth rate of the high 20’s or even 30%, McDermott expressed full confidence that the company’s growth trajectory is on or ahead of target.
My predictions for ServiceNow are very comfortable.
#10 IBM
I was surprised to see that IBM came in with 18% cloud growth for Q2 — and the corresponding constant currency rate was a very strong 24%. Within the overall cloud business, the cloud-revenue growth rate within IBM Consulting was an outstanding 29% and underscores the big strides CEO Arvind Krishna is making in overhauling the company to become more easy for customers to deal with.
My Q2 cloud prediction for IBM did not include a revenue projection due to the accounting gyrations involved in the Kyndryl spinout.
General Report Card
It’s always tricky to grade yourself, and in my case, it was particularly tricky because I was the hapless victim throughout my school days (idiot) of teachers who gave grades based on my actual work than what I expected to get.
So, who knows — maybe I’m trying to make up for that now as I give myself a B+ in forecasting the latest episode in the Greatest Market Growth the World Has Ever Known.
Want to get more insights from Bob Evans and check out cloud-focused content from the Cloud Wars Expo? On-demand video from the event is being released now, with more than 40 hours of cloud education content — featuring 100-plus speakers — to be made available in the coming days. All content is free to Acceleration Economy subscribers with an on-demand pass.