Microsoft Cloud Q4: Growth Slips from Q3, RPO Surges 84%

**Bob Evans** (0:00)
Hello, my friends, and welcome back to Cloud Wars Minute. We're getting more numbers now from the big hyperskillers about how they did for the quarter end of June 2nd, and Microsoft Cloud reported there for their fiscal Q4 numbers. The growth slipped from Q3 to Q4, so from the period ended March 31st to the period ended June 20th. But their RPOs surged 84%, so I don't call it a mixed bag, but relative to what some others are doing, I think we'd have to describe it that way.
So here are the keys for the quarter just ended from Microsoft Cloud. Revenue of almost $60 billion for the quarter up 27%.
The RPOs, as I said, was up 84%. It's now the biggest RPO total slightly ahead of Oracle. Now Microsoft Cloud, 678 billion for that.
They said that Azure revenue was up 43% and that now its revenue for the fiscal year ended June 30th exceeds $100 billion for Azure. And they also said that their applications business, Dynamics 365, was up 13% for the quarter. So I want to put this in context, as I mentioned at the beginning, about what others are doing. Now we'll find out later today what AWS did for Q2. But let's take a look relative to Microsoft and Google Cloud, which announced its Q2 numbers last week. And I got a lot of detail, a lot of head-to-head comparisons, and also some perspective on where we might think that AWS is going to end up with its Q2 numbers. So if you look at the last, I'm sorry, I got this ongoing construction here at World Headquarters.
But if we look at the last five quarters from Microsoft, the growth rate, 27%, starting in Q2, the present, going back five quarters, 27%, 29%, 26%, 26%, 27%. So relatively flat over that period of time, the 29 jumped up a little, but the others, all 27s and 26s. Over those same five quarters, Google Cloud's growth rate has absolutely soared in the trajectory, the arc of its growth, representing customer demand. The marketplace has been remarkable. So again, starting for the just finished quarter and going backward in time, 82%, 63%, 48%, 34% and 32% growth rates. So, you know, there will be those that say, well, Microsoft's much bigger. Of course Google Cloud's growth rates are going to be higher because of the different revenue base, you know, I get that. What we're talking about here is the arc of the growth. My Google Cloud is getting a much bigger share of what's happening here. They're winning more business. They're taking deals away from Microsoft, AWS, and perhaps Oracle in there as well. And they're winning a lot of new business. That's all of what they said on their earnings call recently. Existing customers, in many cases, upping their spend with Google Cloud by 50%.
Now, after I get the results of the earnings call later, so sometime next week, I'll follow up with some more detail about what the Microsoft executives had to say about this. But these numbers are pretty powerful here. And it's just impossible to overlook the market momentum that's taking place. These growth numbers aren't something to do like some how fast a certain chip moves, or how dense a disk drive is. These numbers represent, they stand as a perfect proxy for customer demand. Customers could go out and pick from any one of these vendors and more and more, those decisions are heading toward Google Cloud. The growth rate there spiking like that, is way, way outside of what we saw at Microsoft Cloud. Incredible to grow 27, 26, 29 percent for a $200 billion plus company, all to Microsoft Cloud's benefit there or to its credit. But in contrast, Google Cloud, though smaller, is growing incredibly fast. And it's on a growth rate where you just can't overlook this and say, ah, well, they're smaller. It's no big deal. They are growing at a time when the others are relatively flat. And that's one of the big distinctions here. So we'll get AWS numbers later today, so I'll be following up next week with some insights into that, give the head-to-head comparison. It is an extraordinary time, but the ultimate truth is coming from the customers and where they are deciding to make their investments, to bet their futures and their companies as they move into the AI economy. Thanks for being with us here at Cloud Wars Minute. I hope you have a fantastic day.