Liftr Look Ahead: Q3 Earnings Calls Pt. 1 - AMD's Latest Push Against Intel

2019 Q3 Reports are in!

Quarterly reports for cloud providers and their supply chain usually occur in two clusters. This week, we’ll focus on the earlier cluster of 2019 Q3 reports from cloud providers Alphabet, Amazon, Baidu, IBM, and Microsoft, as well as chip vendors AMD, Intel and Xilinx.

Alphabet, Google’s parent company, reported that Google Cloud Platform saw analytics growth in Q3. Google also continued to focus on growing its enterprise cloud business by introducing its first solution enabling VMware workloads to run on Google Cloud Platform and by increasing its technical and sales headcount.
Amazon, AWS’s parent company, emphasized that it is growing AWS to stay ahead of the rest of the public cloud market. Amazon reported long-term future commitments from customers were up 54% year over year.
Microsoft, Azure’s parent company, crowed about having the most comprehensive portfolio of AI tools, infrastructure and services, and claimed that Azure AI has more than 20,000 customers, with more than 85% of the Fortune 100 companies using Azure AI in the last 12 months.

Baidu Cloud appears to be losing momentum and will stop breaking out cloud revenue from its from overall AI business in the future. Baidu’s overall AI businesses includes smart speakers and other smart devices, combined growth including Baidu Cloud grew over 100% year-over-year. However, Baidu Cloud is a leader in artificial intelligence and it claims that its AI Open Platform developer membership more than doubled year over year, to over 1.5 million members.
IBM is focusing IBM Cloud on “next chapter of cloud” mission-critical workloads, which we read as mainframe migration to the cloud – which totally makes sense for IBM. IBM reported lackluster growth year over year and IBM only mention cloud three times during its earnings call.

New Deployments of Cloud Infrastructure

Alphabet, Amazon, and Microsoft reported continued investment in deploying new cloud infrastructure, either in existing regions to support new AI and analytics capabilities or to expand geographic coverage of capabilities to new regions. Our Liftr Cloud Components Tracker service clearly identifies where each cloud service provider added new capabilities.

Amazon AWS, Google Cloud Platform, IBM Cloud, Microsoft Azure, OVH Cloud, Twitter, and Tencent, all announced plans to deploy AMD EPYC second-generation processors in their data centers. As of the end of October, our LIftr Cloud Components Tracker shows that Azure has deployed EPYC Gen 2 processors in preview instance types, but none of AMD’s newest EPYC processors deployed in production instance types yet at the four clouds we track. Conversely, AMD data center GPU sales were flat year over year at a very low percent of market share.

Intel’s cloud revenue was up 3% year-over-year. Intel predicts a return to growth after cloud service providers burned through their in-house inventories. Considering cloud growth over that period, Intel average selling price for Xeon processors appears to be declining. On the positive side, AWS, Google, and Alibaba deployed new instance types based on the latest Xeon “Cascade Lake” based processor models, which we are measuring in our Liftr Cloud Components Tracker.
Xilinx reported that its realtime video streaming and database acceleration programs are going to production. It has a new relationship with Microsoft Azure to host Alveo U250 FPGA accelerator cards, but our Liftr Cloud Components Tracker has not yet detected Alveo FPGA cards at any of the four tracked cloud service providers.

In early December, Liftr Insights will cover earnings for companies reporting later in the quarter: