According to the information obtained by Zhītōng Cáijīng APP, Microsoft (MSFT.US) has rebounded ahead of its main competitors Amazon (AMZN.US) and Google (GOOG.US) as cloud computing spending slows for the second consecutive year.
Microsoft's Azure cloud business saw a 29% increase in sales in the September quarter, faster than analysts' expectations, partly due to enterprise customers' interest in new artificial intelligence products. In a report released earlier this week, Google's parent company Alphabet took a more cautious tone, stating that cloud customers are still in a cost-cutting mode. On Thursday, Amazon announced mixed results for its cloud business, with sales slightly below expectations but operating profit higher than expected.
Microsoft ranks second in the cloud computing market, behind only Amazon but ahead of Google. Microsoft stated that it has taken market share in cloud computing from its competitors but did not disclose which company specifically.
After the investment frenzy during the pandemic, companies have been &#34;optimizing&#34; spending for most of 2022 and 2023. This means that major cloud providers are competing for large contracts in a more challenging environment, prompting them to seek ways to attract enterprises, including offering the latest AI-based products.
Stefan Slowinski, an analyst at Exane, a subsidiary of BNP Paribas, said, &#34;The workloads accelerating their migration to the cloud will drive the world's development.&#34; &#34;CEOs are making decisions based on intuition, and now they are still cautious.&#34;
It is understood that Microsoft offers many AI tools and has partnered with OpenAI, the developer of the popular chatbot ChatGPT. Microsoft stated that this alliance has helped drive growth in new customers, with its Azure OpenAI service attracting over 18,000 customers, up from the previous 11,000. Microsoft has also invested $13 billion in OpenAI and serves as its cloud provider, so the increasing demand for computing power from OpenAI also benefits Microsoft.
Amazon is trying to attract customers through a variety of different options and has partnered with AI developer Anthropic, which has developed the chatbot Claude. Google, on the other hand, states that it is a popular choice for both large companies and AI startups. Google CEO Sundar Pichai stated in an earnings conference call that over 60% of the world's largest 1,000 companies are Google's cloud customers, as well as &#34;more than half of the companies funding generative AI startups.&#34;
Amazon CEO Andy Jassy stated in an earnings conference call on Thursday that generative AI has brought &#34;billions of dollars&#34; worth of opportunities to Amazon's cloud division AWS. AWS revenue grew by 12%, roughly in line with the previous quarter. However, operating profit exceeded analysts' expectations by approximately $1.3 billion, pushing the cloud computing division's operating profit margin to its highest level since the first quarter of 2022. The cloud computing division remains Amazon's main source of profit.
Amazon's CFO, Brian Olsavsky, stated that some companies are still &#34;optimizing,&#34; but the pace has &#34;begun to slow down.&#34; He also mentioned that some enterprises are making new commitments to AWS or resuming previously paused projects. Amazon also signed several new agreements with customers at the end of the third quarter.
Microsoft's Azure cloud service saw a 29% growth in sales, surpassing the 26% growth rate of the previous quarter, which boosted the company's stock price. CFO Amy Hood stated that while the &#34;optimization trend&#34; is similar to the previous quarter, consumption (a metric measuring Azure service usage) exceeded expectations, and the company witnessed an increase in Azure and Office cloud service contracts worth over $10 million.
Google's cloud computing division saw a 22% year-on-year increase in sales, but the growth rate slowed compared to the previous quarter. The division's sales reached $8.4 billion, lower than Wall Street's expectation of $8.6 billion. The profit also fell short of expectations. Alphabet's CEO, Ruth Porat, mentioned that the division's sales were impacted by some customers tightening their belts. The company's stock price dropped 9.5% the day after the earnings report, marking the largest decline since March 2020.
Max Willens, an analyst at Insider Intelligence, stated, &#34;Cloud computing is a more volatile business than advertising, and Google is facing fierce competition.&#34; He further added, &#34;While in the long run, its appeal in AI startups may yield results, currently, its contribution to Google Cloud is not enough to satisfy investors.&#34;

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In the case of a slowdown in cloud computing spending for two consecutive years, Microsoft's rebound is ahead of its main competitors, Amazon and Google.

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The three giants are fiercely competing in cloud computing, with Microsoft rebounding and leading ahead of Amazon and Google.