In 2021, Alphabet’s (Google) Cloud Business was an over $19 billion unit within Alphabet’s Google overall businessmodel; to gain a bit of context, Microsoft intelligent cloud netted $60 billion, and Amazon AWS netted over $62 billion in the same year.
Revenue Streams
Revenues
Operating Income
Amazon AWS
$19.7B
$5.7B
Microsoft Intelligent Cloud*
$20.9B
$8,7B
Google Cloud
$6.27B
-0.858B
The cloudbusiness is among the most interesting industries of the last decade. Powering up a whole B2B and entperise ecosystem the cloudbusiness has enabled the so-called Web2 or Web 2.0.
Indeed, when AWS officially launched, back in 2006, it was rolled out first as a Simple Storage Service, or S3, on March 14, 2006.ย
Over time it became a powerhouse which enabled hundreds of startups, and some of them became tech giants.
Indeed, still as of 2022, most of Netflix’s content is hosted on AWS.
Netflix never built its own data centers (today, Netflix is mostly hosted on Amazon AWS).
Amazon AWS infrastructure and architecture, which hosts Netflix’s content platform.
Therefore, the cloudbusiness has been tied to the startup world for the last decade and it has actually empowered it.
Today, many tech startups worth billions have their whole infrastructure built on top of cloud providers like AWS and Azure.
That is how AWS has turned into a juggernaut. A company generating over $62 billion in revenues, by 2021, with astounding profit margins.
Amazon AWS follows a platform business model, that gains traction by tapping into network effects. Born as an infrastructure built on top of Amazon’s infrastructure, AWS has become a company offering cloud services to thousands of clients from the enterprise level, to startups. And its marketplace enables companies to connect to other service providers to build integrated solutions for their organizations.
Initially the other key player in the cloudindustry, Microsoft didn’t manage to successfully pick up traction, until the company re-focused its strategy toward cloud.
Microsoft has a diversified businessmodel, spanning from Office to gaming (with Xbox), LinkedIn, search (with Bing), and enterprise services (with GitHub). In 2021, Microsoft made over $168 billion in revenues, of which over $52 billion came from Server products and cloud services and $39.8 billion came from Office products and cloud services. Windows generated over $23 billion, Gaming generated over $15 billion, LinkedIn over $10 billion, and search advertising (through Bing) over $8.5 billion.ย
Not only Microsoft had to move its main productivity offering (Microsoft Office) in the cloud, to adapt to the new market context.
But it also had to employ an aggressive market entry strategy for Azure, which has now become a key competitor to AWS.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
