Google Cloud Q2 Boom Shows Big Momentum Among AI-Hungry Customers

In today's Cloud Wars Minute, I break down Google Cloud’s explosive Q2 performance — including a 32% revenue jump, a $106 billion backlog, and a surge in billion-dollar deals.

Highlights

00:14 — We saw a great re-acceleration by Google Cloud. In Q2, it recorded great numbers across the board. I think what this shows is that large enterprises are buying fully into the Google Cloud value proposition. It's made huge strides there. These are AI-hungry customers who realize they've got potentially a great partner in Google Cloud.

01:05 — Q2 revenue for Google Cloud was up 32% to $13.6 billion. The backlog for Google Cloud was up 38% to $106 billion. This is a number that Google Cloud has not released publicly before. It was buried deep in their numbers. But it brought it up on the earnings call. One quarter ago, it was about $90 billion. It's now at $106 billion. Billion-dollar deals surged.

02:39 — It added 28% more in Q2 than it did in Q1 — huge. Again, a sense of momentum. It's bringing in new revenue, new customers, new prospects. Also, Google Cloud’s parent company, Alphabet, is boosting CapEx by $10 billion for this year — up from the original $75 billion plan.

03:38 — I’ll be looking to see, on July 30, when Microsoft releases its numbers: did they see the same kind of growth acceleration that Google Cloud did? In Q1, Google Cloud’s revenue grew 28%. This quarter, it improved to 32%. While Microsoft’s cloud business is much bigger than Google Cloud, it’s understandable that Google Cloud would have a higher growth rate.

04:35 — Google Cloud is doing a lot of things right — from its AI-native technology and cloud infrastructure business, to what it's doing in data analytics, and the way it's forged partnerships with everybody: Oracle, SAP, ServiceNow, Salesforce, Workday. It's really opened it up.

05:00 — It's making it easier for customers to put together the complex types of solutions needed as we move into this very different future. Hats off to Google Cloud and Thomas Kurian for a great quarter.

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