Dear Andy Jassy: Your Microsoft Numbers Are Full of Holes

In today's Cloud Wars Minute, I take a closer look at AWS’s market positioning and the narrative shared during its recent earnings call.

Highlights

00:36 — I was puzzled by some of the math and the numbers that Amazon CEO Andy Jassy, speaking on behalf of AWS on the Amazon earnings call, used in trying to describe the competitive position that AWS finds itself in.

01:28 — We've got AWS, now on a $123 billion annualized run rate, and which grew 17.5% in Q2, which is extremely good for a company that size. The challenge comes in when you compare it with the growth rates, both in recent-quarter revenue, but also RPO, or backlog. AWS is far, far behind the other three hyperscalers on those metrics, or the rate of acceleration as they each grew from Q2 over Q1.

02:12 — On the earnings call, Jassy said the second player has revenue that's only 65% as big as AWS. So that has to be Microsoft. So he's saying that Microsoft's cloud revenue is more in the range of $75 to $80 billion, but it's more than twice that — $187 billion. I don't get that. Maybe he's trying to say it's only about infrastructure, but he doesn't say that.

03:46 — The issue is that the AWS growth rate is lower than that of Microsoft, Google Cloud, and Oracle, and it has been lower for at least the last eight quarters. Yet on the earnings call, Jassy said, "Sometimes we grow faster than they do, sometimes they grow faster than we do."

04:07 — So, perhaps Andy Jassy, who has been an extraordinary executive, I'm not questioning his overall capability, his record stands for itself. But Jassy is choosing to try to play a little bit of a shell game here, trying to say that Microsoft's whole cloud revenue isn't all there, or some is illegitimate — something like that.

05:26 — It's something that AWS has to address, own up to, and figure out what to do about it. And I think AWS is a great company. I don't think it helps AWS's cause for Andy Jassy to be using some numbers and representations of the market that seem to clash with reality.

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