Introducing Futuriom's Cloud Tracker - Q1 2020


By: R. Scott Raynovich

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Futuriom has released the first Futuriom Cloud Tracker, initiating an ongoing quarterly series for subscribers to Futuriom’s Cloud Tracker Pro technology research service. By tracking the financials, investments, and partnerships of leading cloud players, we aim to identify the trends shaping the worldwide digital networks that support business, remote work, mobile infrastructure, and commercial services.

The COVID-19 pandemic has elevated the reliance on cloud, with workers and consumers making increasing use of cloud services as physical restrictions take place. We are tracking how this is impacting cloud spending and investment.

Although enterprise customers may have stalled on premises build-outs and big cloud projects, there’s been no slowdown in procuring secure remote access to virtual services. Only cloud networks offer timely business continuity and stability for consumer applications. We expect these trends to accelerate cloud investment over the next 2-3 years.

What We’re Tracking

For this first report, Futuriom gathered detailed financial data and capital spending (capex) information for the three-year period from 2017 through 2019, followed by information from the first quarter of 2020. We focused first on capex because that is a leading indicator of service launches and delivery. We also examined revenues, cash flow, and other items, as well as various metrics derived from those figures, to fuel our analysis.

Our findings show that for the major cloud providers, revenues are growing, even as the fallout from the COVID-19 pandemic continues. Capital spending is likewise increasing, even among those firms that cut back in recent years. And a slowdown in network build-outs by enterprises stalled by the pandemic has not affected the need to support remote work through cloud services.

Who We're Tracking

The companies included in the Futuriom Cloud Tracker are market leaders we think collectively represent cloudscale trends, as listed below:

Alibaba (NYSE: BABA)
Alphabet (Nasdaq: GOOGL)
Amazon (Nasdaq: AMZN)
Apple (Nasdaq: AAPL)
Equinix (Nasdaq: EQIX)
Facebook (Nasdaq: FB)
Microsoft (Nasdaq: MSFT)

This list is not comprehensive, and it may change over time, but we believe these suppliers are incorporating the technologies shaping digital transformation. We also will cover important public vendors, such as Oracle (NYSE: ORCL) and VMware (NYSE: VMW), which have reporting cycles that prevent accurate comparisons across traditional calendar quarters and years. But for baseline charts, the suppliers listed above will always be included.

The full 17-page report is available to Cloud Tracker Pro subscribers. We plan to issue this report quarterly going forward.

Key Highlights of Cloud Capex

  • Public cloud capex is steadily increasing, fueled by improved cash flow.
  • Cloud suppliers that hung back on infrastructure spending in recent years are pivoting toward greater capex.
  • Public cloud providers are wresting more control over their own infrastructure from telcos.
  • Enterprise contracts may be stalled, but consumer demand for cloud-enabled remote work is rising, even if slowly.
  • Despite acknowledged lack of near-term visibility, cloud companies are confident of future growth in both business and consumer services.

Futuriom Cloud Tracker Methodology

To ensure accurate comparisons, we’ve taken reported figures from traditional calendar quarters — Q1 covering January through March; Q2, April through June; Q3, July through September; and Q4, October through December. Since some firms have fiscal calendars that differ from this standard reporting pattern, we have extrapolated from their reports to match up their figures for the calendar quarters cited in our graphics.

Each quarter following this first report, we will update our tables, charts, and analyses and offer insights into key trends for cloud players collectively and individually. We will supplement the fresh information with details on the most significant news and deals reported during the quarter.

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