Google Cloud and Microsoft Azure Revenues Drive Significant Revenue Growth for Tech Giants

Bottom line: The growing pace of adoption of cloud computing services has boosted the profits of the two largest tech giants by billions. Microsoft and Google performed well for the quarter, with Azure and Google Cloud leading the way.

In its statement of financial income for the 1st quarter of 2022 Microsoft reported total revenue was $ 45.3 billion, up 22 percent from the same quarter in the previous fiscal year. Operating income was $ 20.2 billion, an increase of 27 percent.

Microsoft Cloud posted revenue of $ 20.7 billion for the quarter, up 36 percent from a year earlier. The strong revenues were mainly driven by the performance of Azure and other cloud services, which grew by 50 percent. Microsoft also said its Intelligent Cloud division reached $ 17 billion in revenue, an increase of 31 percent.

Meanwhile, Google’s parent company Alphabet also announced its financial results for the quarter ended September 30, 2021. Google Cloud revenue took off by 45 percent to $ 4.99 billion, while operating losses declined to $ 644 million, significantly less than the $ 1.21 billion loss in the third quarter of 2020.

In terms of total revenue, the search giant reported a 41 percent increase to $ 65.12 billion, up from $ 46.17 billion in the same period last year. Net income for the quarter was $ 18.94 billion, a significant jump from $ 11.25 billion in 2020.

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Google CEO Sundar Pichai highlighted ongoing search improvements as an example of an investment made, and also highlighted ongoing digital transformation and the shift towards hybrid work models. Also, Pichai stressed that Google Cloud provides “hundreds of new features, services and solutions,” and also mentions “the platform’s leadership in real-time data analysis and artificial intelligence.”

Google Cloud includes both Google Cloud Platform (GCP) and Workspace, formerly known as G Suite. According to Alphabet CFO Ruth Porat, GCP’s revenue “was again above cloud-based overall, reflecting significant growth in both infrastructure and platform services.”

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