Cloud providers Amazon, Microsoft and Google face spending cuts

The cloud computing market continues to grow as companies move more and more workloads out of their own data centers, but executives at a major cloud vendor this week are looking for ways clients can cut costs. said.

As a result, revenue growth in the cloud sector has slowed. Amazon, microsoft and GoogleIt also means lower operating margins and lower profits for Amazon Web Services, the leader in this space. parent company.

This is a phenomenon that began in 2022 as fears of a recession hit the economy. AWS is The third and the 4th Amy Hood, Microsoft Chief Financial Officer for the quarter and last quarter a frightened analyst Along with comments about a slowdown in December, she expected it to persist.

Brian Olsavsky, head of finance at Amazon, said: bad news Speaking to investors on Thursday, he said AWS revenue growth slowed about 5% in April from nearly 16% growth in the first quarter. As a result, the company’s stock price fell.

“Companies remain cautious about their spending during this uncertain time,” said Amazon CEO Andy Jassy.

At Google, Q1 cloud growth slowed to 28% from 32% a year ago. Google’s cloud segment also slows down turn profitable First time on record.

Ruth Porat, Alphabet’s chief financial officer, said on Tuesday’s earnings call that “consumers are serious about optimizing their costs given the macro environment, and headwinds from slowing consumption growth are emerging.” seen,” he said.

Sundar PichaiAlphabet’s CEO said the slowdown was understandable.

“We are leaning toward optimization,” he said. “This is a key moment in helping our customers and we have a long-term view. I am trying to improve.”

Businesses are optimistic that the cloud will continue to be a strong market for technology, as enterprises still have a long way to go before they can fully exploit the benefits of the cloud.

“People often forget that more than 90% of global IT spending is still on-premises,” says Jassy.

Hood also noted that there will soon be financial comparisons from last year when markets began to soften.

“Once you start commemorating it, you’ll find it gets a little easier in terms of comps each year,” Hood said.

clock: Continued slowdown in IT spending not reflected in technology revenue