Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Cloud Giants Report Q3 ‘23 Not a great signal for software this week from the Cloud Giants (AWS, Azure and Google Cloud)…After Q2 (3 months ago), the tone from the Cloud Giants around optimizations was largely: optimizations have started to ease, and net new workloads have picked up. You can see some quotes from Azure / AWS in my
It doesn't make sense to track YOY or QoQ revenue growth percentage for companies at this scale. For startups, new IPOs, hypergrowth stage - yes. But the investment "community" stressing and over-reaction to declining percentage growth numbers of large scale companies is silly - they're beyond the hypergrowth stage. It's just math - as the denominator grows, the numerator has to grow more Instead, these reports would be improved by focusing on revenue dollars and dollar growth. Flat or declining absolute growth is a solid concern. Flat percentage growth for a $10 billion operation isn't.
Lots of companies started cloud optimizations projects at the end of 2022 and H1 of 2023. It seems like the effect of these optimizations might have just shown up on the cloud providers' side.
Cost optimization projects can be either "one and done" or "bend the (growth) curve". The former favors the narrative that net new workloads will continue to pick up. The latter suggests existing customer will no longer grow at the same rate.