Google Vs. Amazon Vs. Microsoft: Q1 Cloud Earnings Face-Off

CRN compares the cloud results of AWS, Google Cloud and Microsoft as the three companies each recently reported their Q1 2023 earnings.

Amazon, Google and Microsoft each reported their cloud earnings results for the first quarter of 2023, with all three cloud giants reporting double-digit sales growth and positive operating income for the first time ever.

Amazon, led by its cloud arm Amazon Web Services (AWS), Microsoft’s Azure cloud unit, and Google’s cloud business Google Cloud are the three largest cloud computing companies on the planet. Combined, these three cloud giants won roughly two-thirds of the massive $63 billion global cloud infrastructure services market during the first quarter of 2023, according to new market share data from Synergy Research Group.

“There has been some angst about declining cloud growth rates, but the Q1 worldwide market value grew by more than $10 billion compared with the first quarter of 2022,” said John Dinsdale, chief analyst at Synergy Research Group, in a statement. “Clearly the relatively weak economy has caused some enterprises to more closely review spending on cloud services, but the market continues to grow despite those challenges.”

AWS, Microsoft, Google Cloud’s Q1 Earnings

AWS, Microsoft and Google reported financial earnings for the first three months of 2023 ending March 31.

While it was officially AWS and Google Cloud’s first quarter of 2023, it represented Microsoft’s fiscal 2023 third quarter. It is key to note that Microsoft doesn’t provide sales figures for its public cloud Azure business. Instead, Microsoft includes Azure revenue as part of its Intelligent Cloud segment.

CRN breaks down the cloud computing financial results for AWS, Microsoft and Google Cloud in terms of: total revenue, year over year sales growth, operating income, global market share, as well as their parent company’s overall results. Here’s what channel partners, customers and investors need to know when comparing Q1 2023 results from AWS, Microsoft Azure and Google Cloud.

Total Cloud Sales

Microsoft: $22.1 Billion

AWS: $21.4 Billion

Google Cloud: $7.5 Billion

Redmond, Wash-based Microsoft reported a total of $22.1 billion in cloud revenue for the first quarter of 2023. However, Microsoft doesn’t break out its Azure cloud sales numbers. Azure sales are included in Microsoft’s Intelligent Cloud segment, which also includes revenue from server products and other cloud services.

Seattle-based Amazon Web Services generated $21.4 billion in worldwide cloud sales during its first quarter 2023.

Google Cloud reported total sales of approximately $7.5 billion for the Mountain View, Calif.-based company’s first quarter 2023.

Cloud Revenue Growth

Google Cloud: 28%

AWS: 16%

Microsoft: 16%

Google Cloud continues to grow revenue faster than its two larger competitors, AWS and Microsoft, by increasing sales 28 percent year over year during first quarter 2023. The company generated total sales of $7.45 billion in the quarter, up from $5.82 billion revenue in first quarter 2022.

Both AWS and Microsoft grew cloud revenue at approximately the same rate during the quarter at 16 percent growth year over year.

AWS’ total sales of $21.4 billion in first quarter 2023 represents a 16 percent increase year over year compared to $18.4 billion.

Microsoft’s Intelligent Cloud segment generated revenue of $22.1 billion, up 16 percent compared to $19 billion year over year. The software giant reported that server products and cloud services revenue increased 17 percent, driven by Azure and other cloud services revenue growth of 27 percent.

Dollars in hand

Operating Income

Microsoft: $9.5 Billion

AWS: $5.1 Billion

Google Cloud: $191 Million

Microsoft’s Intelligent Cloud unit reported operating income of nearly $9.5 billion during the first quarter of 2023, up from $8.4 billion year over year.

AWS trailed Microsoft by generating $5.1 billion in operating income in Q1 2023, representing a decline compared to $6.5 billion in operating income in Q1 2022.

After years of generating an operating loss, for the first time in its history, Google Cloud turned a profit during the first quarter of 2023. Google Cloud generated operating income of $191 million in the quarter, compared to an operating net loss of $931 million year over year.

For its entire fiscal year 2022, Google Cloud reported an operating loss of nearly $3 billion. This is a massive turn from Google Cloud operating at a loss for years to generating profitability in 2023.

Cloud Market Share Q1 2023

AWS: 32%

Microsoft: 23%

Google Cloud: 10%

Following Microsoft, AWS and Google’s first quarter earnings reports, Synergy Research Group released new data on enterprise spending on cloud infrastructure services for Q1 2023. The global cloud infrastructure services market reached $63 billion in first quarter 2023, increasing by 20 percent year over year.

AWS continues to be the market share leader in cloud services, winning 32 percent market share on a global basis in the first quarter.

Microsoft ranks No. 2 in global cloud market share by winning 23 percent share in the first quarter.

In third place, Google Cloud won approximately 10 percent share of the worldwide cloud infrastructure services market.

AWS, Azure And Google Cloud’s Parent Companies Results

Amazon

Total Sales: $127.4 Billion

Operating Income: $4.8 Billion

AWS’ parent company Amazon generated $127.4 billion in sales during the first quarter 2023, representing a 9 percent revenue increase year over year. Amazon’s operating income during the quarter was $4.8 billion, with its AWS segment reporting $5.1 billion in operating income. This means AWS kept its partner company Amazon profitable during the quarter.

Google

Total Sales: $69.8 Billion

Operating Income: $17.4 Billion

Google Cloud’s parent company Google generated $69.8 billion in total revenue during the first quarter of 2023, an increase of 3 percent year over year. The search giant and YouTube owner reported operating income of $17.4 billion, which includes Google Cloud’s $191 million in operating income.

Microsoft

Total Sales: $52.9 Billion

Operating Income: $22.4 Billion

Microsoft generated $52.9 billion in total revenue in the first quarter 2023, increasing revenue by 7 percent year over year. The company’s total operating income was $22.4 billion in the quarter, with its Intelligent Cloud segment reporting $9.5 billion in operating income.