Dear Andy Jassy: Your Microsoft Numbers Are Full of Holes

In today's Cloud Wars Minute, I take a closer look at AWS’s
market positioning and the narrative shared during its recent
earnings call.


Highlights


00:36 — I was puzzled by some of the math and
the numbers that Amazon CEO Andy Jassy, speaking on behalf of AWS
on the Amazon earnings call, used in trying to describe the
competitive position that AWS finds itself in.


01:28 — We've got AWS, now on a $123 billion
annualized run rate, and which grew 17.5% in Q2, which is
extremely good for a company that size. The challenge comes in
when you compare it with the growth rates, both in recent-quarter
revenue, but also RPO, or backlog. AWS is far, far behind the
other three hyperscalers on those metrics, or the rate of
acceleration as they each grew from Q2 over Q1.


02:12 — On the earnings call, Jassy said the
second player has revenue that's only 65% as big as AWS. So that
has to be Microsoft. So he's saying that Microsoft's cloud
revenue is more in the range of $75 to $80 billion, but it's more
than twice that — $187 billion. I don't get that. Maybe he's
trying to say it's only about infrastructure, but he doesn't say
that.


03:46 — The issue is that the AWS growth rate is
lower than that of Microsoft, Google Cloud, and Oracle, and it
has been lower for at least the last eight quarters. Yet on the
earnings call, Jassy said, "Sometimes we grow faster than they
do, sometimes they grow faster than we do."


04:07 — So, perhaps Andy Jassy, who has been an
extraordinary executive, I'm not questioning his overall
capability, his record stands for itself. But Jassy is choosing
to try to play a little bit of a shell game here, trying to say
that Microsoft's whole cloud revenue isn't all there, or some is
illegitimate — something like that.


05:26 — It's something that AWS has to address,
own up to, and figure out what to do about it. And I think AWS is
a great company. I don't think it helps AWS's cause for Andy
Jassy to be using some numbers and representations of the market
that seem to clash with reality.


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