Google Cloud Q2: Revenue +82%, $24.8B, Backlog +390%, $514B

**Bob Evans** (0:00)
Hello, my friends, welcome back to Cloud Wars Minute. Well, we thought we had seen some big numbers in the Cloud Wars over the last few quarters, but Google Cloud for Q2 absolutely blew the numbers away. Astonishing, revenue up 82%, almost $25 billion, and their backlog up 390% to $514 billion. So this combo here, revenue showing the recent past, the extraordinary growth they've had up 82%, and then looking into the future, where backlog represents contracted business, not yet fully recognized as revenue, Google Cloud pulling in some extraordinary numbers there. So one key number that came out of this, I've been looking very closely over the last couple years at the incremental quarter to quarter new revenue that each of the hyperscalers is bringing in, because I think taking nothing away from Microsoft or AWS, but the huge revenue totals they have often, often represent business won in the past, being pulled forward on multi-year contracts. And again, taking nothing away, they earned that, they deserve it. It's outstanding.
But here, particularly with the AI revolution, I think it's even more important to look at who's winning the new business. So, forgetting what happened in the past, if we're looking at today's competitive set, who is winning these new AI contracts? Who's putting AI and Cloud capabilities together in the ways that customers are most interested in? And from Q1 to Q2, Google Cloud's revenue jumped 4.8 billion. That's far larger, not only than what Google Cloud has done quarter to quarter, but Microsoft and AWS, I believe, looking pretty closely over a long period of time. For any of those companies to have a $3 billion increase quarter to quarter has been remarkable. 2 billion, 2.5 billion is very good. 4.8 billion really shows just how much momentum Google Cloud has going here.
I think this is just absolutely a stunning performance. It's brilliant. I've got an article offering some highlights from this and also side by side by side comparisons of the growth that Google Cloud and Microsoft Cloud and AWS, each of them over the past five quarters. So you can track the growth rates. And while you look at Microsoft and AWS with their big revenue numbers, and they're steadily accelerating growth rates over those five quarters, what makes Google Cloud stand out is the arc of their acceleration. It is much, much steeper, much higher in this notion that just because it is smaller in revenue, than AWS and Microsoft, that its high growth rates are meaningless. That's just crazy.
And you'll see, think about this, Q4, Google Cloud's revenue jumped to 48%.
It was pretty close to what Microsoft was doing, a lot bigger before that than AWS. But Q4, Google Cloud really broke away from the pack. 48% growth in Q4, 63% growth in Q1, and here now for Q2, 82%. Just absolutely remarkable. And I think we see that among the hyperscalers and perhaps others as well, Google Cloud is clearly the AI leader that's where they've been distinguishing themselves and pulling away here. And in this article that I've got on cloudwars.com, later summarizing a lot of this, I close with the thought that I've mentioned before here at Cloud Wars about what Google Cloud is doing. Seven years ago, Thomas Curran took over as the CEO of Google Cloud. He was speaking at an investors conference and he was asked, well, right now, Google Cloud doesn't have much of a commercial presence and Microsoft Cloud and AWS is so much bigger. How will you ever catch them? And he said, I don't think that's the issue. He said, my job is to catch them. My job is to do a fabulous job for the customers we have. And he said, I think what customers will want in the future from the Cloud is different than what they've wanted in the past. So he said, we're going to play the game on the field right here, right now. And going forward, there's no question. Google Cloud has established itself by far, by far the hottest hyperscaler. While Microsoft Cloud and AWS have bigger revenue numbers, Google Cloud is the one setting the pace, winning more customers, winning new business and setting the pace with technology, go to market innovation and the confidence in large part delivered by the remarkable security business they've built, that they can handle everything that customers need as they move in to the AI economy. Thanks for being with us here at Cloud Wars Minute, and I hope you have a fantastic day.