In 2022, Alphabet’s (Google) Cloud Business was over $26 billion unit within Alphabet’s Google overall business model; to gain a bit of context, Microsoft intelligent cloud netted $75 billion, and Amazon AWS passed $80 billion in the same year.
How does Google’s cloud business model work?
Google Cloud revenues consist primarily of revenues from Google Cloud Platform comprising G Suite productivity tools and other enterprise cloud services provided on either a consumption or subscription basis.
The cloud business unit is extremely important for Google as the whole company was built in the cloud. Now the Cloud includes Google Cloud Platform and G Suite enabling developers to build, test, and deploy applications on Google’s infrastructure.
The G Suite productivity tools comprise apps like Gmail, Docs, Drive, Calendar, and more.
How does Microsoft Intelligent Cloud business model work?
Microsoft’s Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business.
The segment primarily comprises:
- Server products and cloud services, including SQL Server, Windows Server, Visual Studio, System Center, and related CALs, GitHub, and Azure.
- Enterprise Services, including Premier Support Services and Microsoft Consulting Services.
Server Products and Cloud Services
The key value proposition for Microsoft’s server products and cloud services is to make IT professionals, developers, and their systems more productive and efficient.
As Microsoft highlights:
Server software is an integrated server infrastructure and middleware designed to support software applications built on the Windows Server operating system.
Azure is a comprehensive set of cloud services that offer developers, IT professionals, and enterprises the freedom to build, deploy, and manage applications on any platform or device.
Enterprise Services, including Premier Support Services and Microsoft Consulting Services, assist customers in developing, deploying, and managing Microsoft server and desktop solutions and provide training and certification to developers and IT professionals on various Microsoft products.
What does Amazon AWS comprise?
AWS arrangements include global sales of computing, storage, database, and other services. The Amazon AWS business model proved incredibly scalable and it’s among the most profitable units for the organization.
Amazon AWS’s story is quite interesting as it shows how by tinkering organizations scaling up might come up with whole new business units that while seemingly disconnected from the main business, in reality, are the foundation and then become key business units that run their own business model.
Cloud Business Models Overview: Google, Microsoft, Amazon AWS
- Google Cloud Business Model:
- Components: Google Cloud Platform (GCP), G Suite productivity tools.
- Revenues: Primarily from GCP and G Suite on consumption or subscription basis.
- Importance: Google Cloud integral for Google; built on it. Includes GCP and G Suite for app deployment and productivity.
- G Suite: Productivity tools like Gmail, Docs, Drive, Calendar, etc.
- Focus: Developing and deploying enterprise-ready cloud services.
- Microsoft Intelligent Cloud Business Model:
- Components: Server products, cloud services (Azure, SQL Server, Windows Server), Enterprise Services (Premier Support, Consulting).
- Revenues: $67B+ from Server products and cloud services, $44.8B+ from Office products and cloud services (2021).
- Value Proposition: Enhancing productivity and efficiency for IT professionals, developers, systems.
- Server Products and Cloud Services: Server infrastructure, middleware, software suite.
- Azure: Comprehensive cloud services for application building, deployment, management.
- Enterprise Services: Premier Support, Consulting for Microsoft solutions.
- Amazon AWS Business Model:
- Components: Computing, storage, database services, marketplace for cloud solutions.
- Model: Platform business, taps into network effects.
- Revenues: Global sales of cloud services, one of Amazon’s most profitable units.
- Scalability: Evolved from Amazon’s infrastructure, offers services to enterprises and startups.
- Marketplace: Connects service providers to build integrated solutions.
- Google: Cloud comprises GCP, G Suite; pivotal for Google, built on it.
- Microsoft: Diversified model, Azure and Server products cater to IT efficiency.
- Amazon AWS: Evolved from Amazon’s infrastructure, scalable, taps into network effects, offers wide range of cloud services.
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