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Tech leaders this week could be forgiven for having their heads in the cloud.

Amazon and Microsoft both reported quarterly earnings this week, and both were dominated by the cloud. And IBM last night said its CEO would step down, to be replaced by the company’s current head of cloud computing.

Microsoft: exceeding expectations

Earlier this week Microsoft reported financial results for its second fiscal quarter, and the big surprises all came from the cloud.

Don’t forget that CEO Satya Nadella, who assumed his current role in 2014, previously ran Microsoft’s cloud-computing business. Under his leadership, Microsoft has become a major cloud player with Azure, Office 365 and other related services.

Satya Nadell

Microsoft CEO Satya Nadella: cloud-driven

For the company’s second quarter, cloud sales increased by an impressive 62%. Revenue from Microsoft’s commercial cloud computing business grew 39% to $12.5 billion. And sales of its intelligent cloud segment, which includes Azure, rose 27% to $11.87 billion.

Those numbers handily exceeded the expectations of financial analysts. And the company has been handsomely rewarded: Microsoft's stock price has risen this week by nearly 4%, pushing the company’s market cap to $1.32 trillion.

Amazon: billions

Amazon reported financial results for its fiscal Q4 this week. The company is in a tough spot. Its cloud business is huge and growing fast – just not as fast as it has in the past.

Specifially, Amazon Web Services, the company’s cloud-computing operation and main profit center, reported Q4 sales of $10 billion, up 34% from the year-earlier quarter. For most businesses, that would be great. But in the past, AWS has grown by more than 40% a quarter.

AWS’s operating income for the quarter also rose. It was up 19% to $2.6 billion.

One trouble spot: Amazon is protesting the U.S. Dept. of Defense's decision to award a major cloud contract to Microsoft. The contract, awarded in October, is for DoD’s Joint Enterprise Defense Infrastructure, or JEDI for short.

The JEDI contract is valued at $10 billion over the next decade, so you can see why Amazon is upset about losing. The company’s protest alleges that the JEDI evaluation process was marked by errors, deficiencies and bias.

IBM: cloud to CEO

Last night, IBM CEO Ginni Rometty surprised the world by announcing that she is stepping down. Rometty has been IBM’s CEO for the last 8 years, and her resignation will become effective in April.

Ginni Rometty

IBM CEO Ginni Rometty: stepping down

IBM’s new CEO is the man who’s been running the company’s cloud business: Arvind Krishna. He’s worked at IBM for 30 years, most recently as head of its cloud and cognitive software division, which includes Watson AI technology. Krishna will formally become CEO on April 6.

The new tech-industry forecast? Clouds, clouds and more clouds.

 

Blog Category: 
Cloud and Data Centers
Topic Category: 
Industry Trends