Satya Nadella to Competitors: “MSFT Is #1; You Can All Fight for Runner-Up”

In today’s Cloud Wars Minute, I discuss Satya Nadella’s bold Q4 claim that Microsoft is the #1 cloud provider, leaving rivals to fight for second place.

Highlights

00:12 — Microsoft laid out a very clear, unmistakable story in Q4 that it is the biggest and right now certainly the most powerful, most influential cloud provider. CEO Satya Nadella used the opportunity of these unprecedented financial results to spread the word that, “We’re number one, and all of the other hyperscalers — Google, Oracle, and AWS — can fight for the number two spot.”

01:06 — Q4 cloud revenue was up 27% to 46.7 billion. Full year cloud revenue was $168 billion, up 23%. One that really blows me away, its RPO for Q4 was $368 billion up 37%, so that is remaining performance,obligation, contracted business not yet recognized as revenue. Then for Azure, for the full year, $75 billion and a 39% growth rate in Q4. So pretty powerful stuff.

02:04 — Nadella said, "We're the leaders in breadth of AI products and AI infrastructure." He said, "In our overall tech stack, nobody can touch us, and that's how we're able to deliver at this scale." He said, "We have more data centers than anybody else does," cutting against some claims that have been made by Oracle and others. "We are outperforming everybody else."

03:16 — I thought it was interesting that, without identifying those specific companies, he referred to our competitors and that we're doing more than them. Now, I think this was a smart move by Nadella, right? Because we're not talking about some technical features — these are the technological foundations that business leaders will be betting the future of their companies on.

03:55 — So, the hyperscalers with the best overall capabilities are going to be the ones that those business leaders tend to go with. I think it's a smart move by Nadella here to say, in my view, here's where we stand. We're out ahead of the others on all this. Now, I'm sure Google Cloud, Oracle, and AWS will have their own points of view on this, and I would encourage all of them to speak up.

04:20 — I'm not talking about name-calling, but a very clear and well-articulated, reasoned, customer-oriented set of here's where I stand versus competitors here. I was glad to see this from Microsoft. I hope everybody does it, and later this morning on Cloud Wars, I'll have a detailed article offering the verbatim comments that Nadella made about these different subjects.

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