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January 27, 2017updated 31 Jan 2017 4:22pm

Cloud growth clears away the January gloom for tech giants reveling in revenue growth

There’s a lot of market for cloud to eat in to and it doesn’t look like slowing down any time soon for the likes of Microsoft, VMware, SAS, IBM and more.

By James Nunns

January is typically a time of year that’s filled with a bit of gloom. Gone are the colourful Christmas decorations, replaced by grey, drab weather and a lengthy gap between pay days.

Although London, and the country as a whole, may be faced with a gloomy month of train strikes, grey skies, rain  and non-stop Brexit discussions, it has proved to be a happy month for those tech companies that are banking on cloud computing technology.

That’s right, it’s financial reporting season and while overall revenues can be a mixed bag, particularly for some of the older tech giants, there is one constant note of optimism – cloud.

A quick glance across the coverage of the financial results from the likes of SAP, IBM, Microsoft, Alphabet, VMware, SAS, Intel, all show a finger being pointed at cloud as either saving or boosting financials.

First off you can see the old guard, companies like IBM, SAP, and SAS. IBM for example reported that IBM Cloud revenue growth went up 35% year-to-year up to $13.7bn, while its cloud as-as-service run rate was $8.6bn, up 63% year-to-year. Although it’s overall financial results point to there still being significant struggles, the silver lining is IBM Cloud.

SAP reported 2016 cloud subscription and support revenue up 31% to €2.99bn and forecast its cloud business to reach €29 Billion total revenue in 2020.

Then you have SAS, not strictly a cloud company, but the company posted $3.2bn in total revenue, up 4% over 2015 and driven in part by cloud. The company points to associated revenue rising nearly 9% due to a growing demand for cost-effective, convenient and secure methods for accessing SAS solutions.

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Microsoft reported revenue for its Intelligent Cloud segment, which includes Azure as well as Windows Server products, with revenue up 8% to $6.9bn for the second quarter. The company said Azure revenue increased 93%.

Intel, while aiming at a different area of the cloud industry – chips, reported an 8% year-over-year revenue increase for the quarter bringing in $4.7bn.

What this all points to is the old guard seeing success to differing standards thanks to a shifting reliance upon the cloud industry.

On the new breed front you have the likes of Alphabet, with the cloud unit of Google a part of a 62% growth to $3.4bn in the fourth quarter. Giving a precise figure for Google Cloud growth is impossible due to the unit’s results being combined with various other revenue figures.

Google’s main revenue source of advertising remains the dominant force, growing 17.4% to $22.4bn in the quarter, but clearly cloud is among one of its strongest growth areas.

VMware meanwhile has quashed rumours of the demise of vSphere and troubles caused by the Dell acquisition of EMC by reporting an extremely successful year.

Q4 for the company saw revenue of $2.03bn, up 9% year on year and the company even surpassed the $7bn mark for the year with revenue of $7.09bn, up 8% on 2015.

The company spent a lot of 2016 pushing more significantly in the cloud area with its Cross-Cloud and significant partnerships with the likes of Amazon Web Services and IBM Cloud bolstered its already existing support for Microsoft Azure.

VMware’s cloud journey is one that predicts private cloud to remain an important factor as businesses continue to see it as an important element of their cloud strategies.

So, what does this tell us? Well it tells us that the cloud continues to provide a significant opportunity for growth among tech companies that are both young and old.

The success isn’t just a public cloud one, private remains a significant area of growth and that all bodes well for the likes of Intel and it providing the chips for the servers that run in the data centres. Tech companies that are looking at providing hybrid cloud options, such as IBM Cloud, Microsoft Azure & VMware, will all clearly benefit from growth across all segments.

Expect to see these growth figures continue to rise at a significant rate throughout the year as more and more businesses see the value of cloud and either begin to adopt it or significantly increase their reliance upon it.

It shouldn’t be forgotten that the cloud market is still effectively in its infancy and has a way to go till it surpasses the traditional enterprise IT market. Gartner projected that the public cloud services market alone would total $208.6bn, while IDC predict that worldwide IT spending will surpass $2.8 trillion in 2019.

There’s a lot of market for cloud to eat in to and it doesn’t look like slowing down.

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