For cloud giants, usage soars but tech investment delays hobble revenue growth - CNA |
| For cloud giants, usage soars but tech investment delays hobble revenue growth - CNA Posted: 01 May 2020 03:12 AM PDT  SAN FRANCISCO: As lockdown orders force billions of people to work, learn and play from home during the novel coronavirus outbreak, usage has surged for the cloud computing services that power video conferencing, streaming television and online games. The world's three leading cloud services providers - Amazon.com Inc's Amazon Web Services, Microsoft Corp's Azure and Alphabet Inc's Google Cloud - have all seen demand for their services jump. In particular, peak daily usage for Google's Meet videoconferencing tool has shot up 30-fold since January while the number of daily users for Microsoft's Teams chat system has more than doubled to 75 million since early March. But at the same time, the companies have seen a drop-off in new contracts from big clients for server storage and to overhaul technology, company executives and analysts said this week. The massive, multi-year deals normally account for a greater portion of revenue than contracts for workplace software such as Teams and Meet. Delays in setting up new servers and generous free trial offers also capped sales growth in the first quarter. For instance, Microsoft said it put limits on how much cloud computing new customers could consume because of equipment shortages due to lockdowns. "We're generally utilising servers and infrastructure that we'd already bought ... because the ability to get tons and tons of new servers in with the supply chain out of China was constrained," Microsoft Chief Financial Officer Amy Hood told Reuters in an interview. The cloud provider sector saw first-quarter revenue growth of about 34 per cent, less than the 37 per cent growth in the fourth quarter, according to research company Canalys. It added there had been little change in market share for the top three in the US$31 billion global industry. "Cloud investment in the worst-affected vertical segments, such as hospitality, aviation, construction, tourism and manufacturing, is being scaled down or delayed," Canalys said in a report on Thursday. "This has offset some of the short-term growth enjoyed during the quarter." Whether the cloud providers see a boost to overall revenue growth from the pandemic in the current quarter or later this year remains unclear. Businesses and governments have begun to transition from rolling out emergency measures to preparing for re-opening in the coming months, but their virus-hammered budgets could curtail spending and force cloud providers to extend giveaways. Market researcher IDC last week downgraded its forecast for global IT spending in 2020 to a 2.7 per cent decline compared with a previous estimate of a 3.6 per cent rise because of the pandemic. DELAYS ABOUND Microsoft Azure, which is No. 2 in cloud revenue after Amazon Web Services, saw its sales growth rate slow the most, at 59 per cent in the first three months of the year from 62 per cent in the prior quarter, company data showed. One of Microsoft's biggest sources of revenue is large businesses tackling complicated technology problems, like moving entire financial software systems to Microsoft's cloud from their own servers. Microsoft executives said this week that while large companies like Anheuser Busch InBev NV are continuing with these migrations, growth in consulting revenue that often accompanies these complex projects had tapered as customers postponed projects. As much as a fifth of Microsoft's cloud revenue could face volatility in the coming quarter because of those delays, the company said. Google Chief Executive Sundar Pichai also said this week that it is taking longer to close cloud deals but did not offer revenue guidance. In the first quarter, revenue for Google Cloud, which includes sales of storage services as well as workplace software, grew 52 per cent from a year earlier compared with 53 per cent in the prior quarter. John Dinsdale, a chief analyst at Synergy Research Group, said though some buyers are delaying, their plans to adopt more cloud services have not changed. "The signs for the leading cloud providers remain very positive," he said by email. Amazon, which saw Amazon Web Services revenue growth drop to 33 per cent in the first quarter from 34 per cent a quarter earlier, pointed to an increase in future spending commitments from customers as evidence its business remains healthy. But pandemic-related restrictions and shortages may crimp future revenue growth. Google said it could face delays on developing new data centers, and Microsoft's Hood told Reuters that construction delays for data centers will persist. "We'll just continue to follow government guidelines and get back to construction when it is safe to do so," Hood said. |
| Google Pixel 4 buyers won’t get unlimited photo uploads at original quality - The Verge Posted: 15 Oct 2019 09:00 AM PDT  The Pixel 4 and 4 XL will launch without one of the original great reasons for owning a Pixel phone: free unlimited photo backups to Google Photos at full resolution. Google's website for the new devices only notes that they're eligible for the same storage option as any other phone, which is unlimited backups at "high quality." This option compresses your images when they're uploaded to the cloud, which is why Google is able to offer it so freely. Nowhere on the Pixel 4 site does it mention free storage at original quality, which was a major incentive for purchasing the original Pixel, Pixel 2, and Pixel 3. iPhone owners had to keep an eye on their iCloud storage, but Pixel users could always snap away care free. Not anymore. Google didn't extend it to the Pixel 3A and 3A XL, but that was understandable due to their much lower price point. The Pixel 4 starts at $799, and the XL version is $899. These aren't cheap phones. Pixel 3 owners get free storage for their original-quality photos and videos until January 31st, 2022. So they're in the clear for a long time before having to worry about paying anything. But the Pixel 4 won't get you special treatment anymore. Google has confirmed directly to The Verge that the deal isn't on offer this time around. Why the change? The Pixel 4's main camera is still 12 megapixels, so it's not churning out larger files. The portrait lens is 16MP — a bit larger yes, but not really enough to stress Google's cloud when you factor in how many Pixels the company usually sells. The real reason is subscriptions. Google is including a three-month free trial of its Google One subscription service with Pixel 4 purchases, and that membership comes with 100GB of storage (and is eligible for family sharing). So Google might be hoping to shift Pixel owners who need bountiful backup space over to a recurring subscription. |
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