In today's Cloud Wars Minute, I look at the shift in enterprise preference from Microsoft to Google Cloud.

Highlights

00:15 — The three original hyperscalers all released numbers for Q3 last year. Each should be proud, but Google Cloud stood out in a significant way. Its Q3 revenue is up 34% to $15.2 billion. Its Q2 growth had been 32%, so, accelerating here. Mid-year, it said its CapEx would be $75 billion for all of 2025. A few months ago, it said, “Now we’re going to have to make it $85 billion..."

01:38 — Now it's saying it’s going to be somewhere between $91 and $93 billion for this year. If you take the three hyperscalers in their Q3 performance here: $49.1 billion for Microsoft, up 26%, , terrific results. AWS, $33 billion; that was up 20%, so accelerating from Q2’s 17.5% — very nice. And then Google Cloud, $15.2 billion, as I mentioned, up 34%.

02:39 — AWS and Microsoft are much larger than Google Cloud. Regarding new business Microsoft added $2.4 billion, AWS $2.1 billion, and Google Cloud $1.6 billion. So how does that play out? Well, of the $6.1 billion in incremental new revenue, Q3 over Q2, Microsoft got 39.3%, AWS, 34.4%, and Google Cloud,26.2%. So, for Google Cloud, 15.6% overall, but 26.2% of the new business.

03:47 — My point here is that some previous long-range contracts that these companies have been winning have positioned AWS and Microsoft as much larger than Google Cloud; they’ve earned that. But looking forward here, in the early days of the AI Revolution, Google Cloud is gaining a disproportionate share of new business based on its size relative to AWS and Microsoft.

04:44 — But I think the interesting thing here is to say, of the new business and looking forward, who’s winning this stuff — sort of right here, right now — forgetting the size disparities that have been up in the past. And Google Cloud, on that front, is looking very good.

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