Three hyperscalers have ramped up their customer commits by a staggering š $73.4Bn in just a year, driving nearly 2X growth in their cloud marketplaces YoY. Here is why we should learn how to tap into them.
The push to the cloud persists, even against the backdrop of economic uncertainty. It also remains undeterred by the efficiency mindset. From AI innovations to migrations from on-prem, the cloud wave is undeniable.
š While this cloud growth is evident in the hyperscalers' revenue, an even more notable data point is the swift growth of cloud commits.
Commits are multi-year contracts signed by customers, binding them to consume a specific amount of cloud services in return for volume discounts. Significantly, hyperscalers allow customers to utilize these commits to purchase 3rd party software in their cloud marketplaces. Why? Because this accelerates their growth, customer retention, and network effects of their ecosystems.
Here's a glance at the cloud commits of each hyperscaler, compared to just 12 months prior:
š²š² Amazon Web Services (AWS)
2022 commits (on Sept 30): $104.3 Bn
2023 commits (on Sept 30): $133 Bn
Growth: +$28.7 Bn (+28%)
A near 30% growth in AWS commits in a single year is a compelling testament to the customer's shift to the cloud. AWS stands as the leading hyperscaler, indicating the health of the entire cloud ecosystem. It also was AWS that pioneered the concept of cloud marketplaces, now reshaping the way software, and soon other services, are transacted.
š² Google Cloud
2022 commits: $52.4 Bn
2023 commits: $64.9 Bn
Growth: +$12.5 Bn (+24%)
Google, with its strength in AI and data, aims to catch up. It achieved profitability in Q1 this year and has stayed profitable since. While still striving to meet analyst estimates in revenue, it shows strong growth in cloud commits (i.e. revenue backlog).
š²š² Microsoft Cloud
Last year: $180 Bn
This year: $212 Bn
Growth: $32 Bn (+18%)
Microsoft Azure's estimated commits: $106 Bn (50% of the total).
MSFT only discloses total commits for Microsoft Cloud. However, given Satya Nadellaās remark in July about "Microsoft Cloud surpassing $110 billion in annual revenueā¦ with Azure accounting for over 50% of the total for the first time", it's fair to assume that half of the $212 Bn commits related to Azure.
Cumulatively, AWS, Azure and Google Cloud boast $303 Bn in cloud commitments, which are growing at a very impressive 20%+ YoY.
This explains the core driver and size of the opportunity in cloud marketplaces of these hyperscalers. Are you leveraging them already?
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