Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

The three largest cloud companies on the planet - Amazon Web Services, Google Cloud and Microsoft - have now all reported their quarterly financial earnings for the second quarter of 2023.

The three tech giants generated a total of roughly $54bn in cloud sales combined during the second quarter.

AWS reported its slowest sales growth rate in years, while Google Cloud generated its highest operating income in its history.

"Our AWS growth stabilised as customers started shifting from cost optimisation to new workload deployment," said Amazon CEO Andy Jassy during the company's second-quarter 2023 earnings report.

Combined, AWS, Google and Microsoft own 65 per cent of the worldwide cloud services market in second-quarter 2023, according to brand-new cloud market-share numbers from Synergy Research Group.

CRN provides a side-by-side comparison of each company's: total revenue, operating income, sales growth rates, parent company results and new second-quarter cloud market-share standings.

AWS, Microsoft and Google's Q2 2023 cloud market share

Before jumping into Google, Microsoft and AWS' earnings and market-share data, it is key to note that t he entire cloud infrastructure services market increased by $10bn in second-quarter 2023 year-over-year.

Worldwide spending on enterprise cloud infrastructure services reached nearly $65bn in the second quarter, representing a growth rate of 18 per cent, or $10bn year-over-year.

Although the current economic climate has affected growth in cloud spending, Synergy Research Group said the market continues to expand at a healthy rate despite short-term challenges.

"We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend and driving operating leverage," said Microsoft Chairman and CEO Satya Nadella during his company's quarterly earnings report last week.

Google and Amazon unveiled their Q2 2023 earnings results, which ended 20 June 2023. In the same three-month span, it represented Microsoft's fourth fiscal quarter 2023.

CRN breaks down the five biggest revenue, income, growth and new market-share numbers that every AWS, Microsoft and Google Cloud partner, customer and investor should know.

Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

Q2 total revenue/annual run rate

AWS: $22.1bn/$88bn

Google Cloud: $8.03bn/$32bn

Microsoft: $24bn/$96bn

AWS captured total revenue of $22.1bn in second-quarter 2023.

The cloud computing pioneer now has an annual run rate of more than $88bn.

Google Cloud generated total revenue of $8.03bn in second-quarter 2023, beating Wall Street's sales projection of approximately $7.8bn.

The company now has an annual run rate of approximately $32bn, the largest in Google Cloud's history.

Microsoft does not provide to the public its Azure sales figures. Instead, Microsoft combines Azure, server product and other cloud services revenue all under its Microsoft's Intelligent Cloud umbrella.

The company's Intelligent Cloud group generated $24bn in revenue during its fourth fiscal quarter 2023.

This means Microsoft's Intelligent Cloud group has an annual run rate of $96bn.

Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

Sales growth

Google Cloud: 28 per cent

Microsoft: 15 per cent

AWS: 12 per cent

Google Cloud's just over $8bn in revenue generated in second-quarter 2023 represented a year-over-year growth rate of 28 per cent.

This was the highest sales growth rate increase out of the three cloud companies. In first-quarter 2023, Google Cloud reported a similar 28 per cent sales growth rate year over year on revenue of $7.45bn.

It is key to note, again, that Microsoft doesn't provider Azure sales figures by themselves. Azure revenue is counted as part of Microsoft's Intelligent Cloud group.

The company's Intelligent Cloud group reported a 15 per cent sales increase year over year on total sales of $24bn for its fourth fiscal quarter 2023.

During third-quarter 2023, Microsoft's Intelligent Cloud group increased sales by 16 per cent year-over-year.

AWS reported one of its lowest sales growth rates in the company's history during second-quarter 2023.

AWS' $22.1bn in sales represented 12 per cent year-over-year sales growth.

Comparatively, during AWS' second-quarter 2022, the company increased sales by 33 per cent year-over-year.

Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

Operating income

Microsoft: $10.5bn

AWS: $5.4bn

Google Cloud: $395m

Microsoft's Intelligent Cloud group reported operating income of $10.5bn during the quarter, up $1.7bn, or 20 per cent year-over-year.

Gross margin increased 16 per cent year over year, or by $2.3bn, according to Microsoft, driven by growth in Azure and other cloud services.

AWS captured operating income of $5.4bn in second-quarter 2023, representing a six per cent decline year-over-year compared with $5.7bn.

The drop was due to a roughly $2.7bn increase year-over-year in operating expenses for AWS during second-quarter 2023.

Google Cloud generated operating income of $395m in second-quarter 2023.

In the same quarter one year ago, Google Cloud reported an operating loss of $590m.

This means the company improved its operating income by nearly $1bn year-over-year in second-quarter 2023.

Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

Global cloud market share of $65bn in Q2 2023

AWS: 32 per cent

Microsoft: 22 per cent

Google Cloud: 11 per cent

Worldwide enterprise spending on cloud infrastructure services reached $65bn in second-quarter 2023, up 18 per cent, or $10bn, year-over-year, according to new market-share data released by Synergy Research Group.

AWS is the world's No. 1 market-share leader for cloud infrastructure services by capturing 32 per cent global share.

Microsoft ranks No. 2 by winning 22 per cent worldwide market share.

Google Cloud placed third by capturing 11 per cent market share.

In aggregate, these three companies accounted for 65 per cent of the global cloud services market in second-qurater 2023.

Looking at Synergy Research Group's first-quarter 2023 market share numbers, AWS won 32 per cent share, Microsoft captured 23 per cent share and Google Cloud won 10 per cent share.

Microsoft vs AWS vs Google: Cloud Q2 earnings face-off

Here are the second-quarter 2023 earnings results from AWS, Google and Microsoft, compared

Parent company results and growth comparison

Amazon: $134.4bn

Amazon increased revenue by 11 per cent in second-quarter 2023 by generating total revenue of $134.4bn compared with $121.2bn in second-quarter 2022.

AWS' 12 per cent sales growth year-over-year was on par with parent company Amazon's growth rate.

Amazon generated operating income of $7.7bn in second-quarter 2023, compared with $3.3bn year-over-year.

It's key to note that Amazon's North American market segment's operating income increased the most, with operating income of $3.2bn in the region compared with an operating loss of $600m in second-quarter 2022.

Google/Alphabet: $74.6bn

Google Cloud's parent company, Alphabet, generated total revenue of $74.6bn during the second quarter, representing a seven per cent increase year-over-year.

Google Cloud increased revenue by 28 per cent during the quarter, about four times faster than its parent company.

Alphabet reported operating income of $21.8bn during the quarter, up from $19.4bn year-over-year.

Microsoft: $56.2bn

Microsoft reported total revenue of $56.2bn for its fourth-quarter 2023, representing an increase of 8 per cent year-over-year.

Microsoft's Intelligent Cloud group saw revenue growth of 15 per cent year-over-year, nearly doubling Microsoft's growth.

Microsoft reported total operating income of $24.3bn, up 18 per cent year-over-year.