Boeing Co. has become a cloud customer. The company is using all three cloud computing giants—Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google to transform its digital footprints.
The aircraft manufacturer signed a multiyear agreement with big tech companies to upgrade it’s hosting and maintain its software applications through a network of servers. Boeing wants to move its applications to cloud where they will be maintained at data centers operated by cloud service providers.
Boeing is upgrading its technology to avoid delays and glitches that increase the costs of producing new aircrafts. It’s investing in tools like digital twins where there is a virtual model of actual hardware that could help the company envision new aircraft concepts and assembly lines that would build these aircrafts.1
Google is aiming to operate 24/7 on carbon-free energy by 2030. The company has come a long way. In 2007, Google said it had become carbon-neutral, wherein it purchased the same amount of carbon offsets to make operations zero emissions. In 2017, the company matched total electricity use with renewable energy purchases.2
Maud Texier, the head of energy development for data centers at Google, said that being able to design each stage of the data centers’ hardware and software are beneficial to the company, and could help the company become more efficient.
Microsoft’s Cloud Business Exceeds Expectations
Global software giant and emerging cloud computing company Microsoft Corporation reported robust financial performance for its most recent quarter.
Its cloud computing business has been in the limelight, and the recent quarter proved once again that Microsoft’s Azure is gaining traction. Azure Cloud Infrastructure grew 49% in the most recent quarter in constant currency terms. This was higher than expected by the company and analysts following Microsoft.
Microsoft’s CFO, Amy Hood said that numerous contract renewals for the cloud product is a sign that customers are satisfied, getting great value, and willing to commit again.3
Amazon’s AWS Continues to Drive Growth
Amazon.com said its business growth for Amazon Web Services (AWS), which is the largest cloud services provider, increased 36.5% in the first quarter of 2022. This was faster than analysts had projected.
Amazon’s AWS revenue jumped to $18.44 billion and amounted to 16% of the company’s total revenue. It’s also a very profitable endeavour for the company—AWS produced an operating income of $6.52 billion, which was up 57%.
Furthermore, automaker Stellantis (formerly known as Fiat Chrysler) will be using AWS for its in-car dashboard software. Best Buy, a brick-and-mortar and emerging online retailer, also opted for more AWS tools during the first quarter.4
SAP’s Promising Cloud Software Business
SAP SE., Europe’s largest software maker with a growing cloud software business, said that the Russia-Ukraine war would impact profits in 2022.
However, there’s a bright spot: the company’s cloud software business jumped 25% in the first quarter of 2022. Its cloud backlog soared 23% year-over-year. These are promising figures as SAP is in the midst of moving most of its business to the cloud.5
DATA ETF: Investing in the Cloud Computing Industry
Cloud Computing is transforming the global economy. Over the past decade, the Cloud has fundamentally changed the way businesses and individuals access data. From physical servers to portable drives, the Cloud has helped eliminate the need to store information on-premise. If you’re interested in investing in a cloud computing ETF, consider the Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF. For more information visit the fund page here: https://evolveetfs.com/product/data/
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- Johnsson, J. and Day, M. “Boeing Taps Amazon, Microsoft and Google for Cloud Mega-Deal,” Yahoo! Finance, April 6, 2022; https://finance.yahoo.com/news/boeing-taps-amazon-microsoft-google-110000719.html.
- Clifford, C. “How Google plans to use 100% carbon-free energy in its data centers by 2030,” CNBC, April 13, 2022; https://www.cnbc.com/2022/04/13/google-data-center-goal-100percent-green-energy-by-2030.html.
- Bass, D. “Microsoft cloud growth propels higher quarterly sales, earnings,” BNN Bloomberg, April 26, 2022; https://www.bnnbloomberg.ca/microsoft-cloud-growth-propels-higher-quarterly-sales-earnings-1.1757333.
- Novet, J. “Amazon’s cloud business grows almost 37%, but slows from last quarter,” CNBC, April 28, 2022; https://www.cnbc.com/2022/04/28/aws-earnings-q1-2022.html.
- Denton, J. “SAP Stock Falls After Earnings. Exiting Russia Will Hurt the Software Giant,” Barron’s, April 22, 2022; https://www.barrons.com/articles/sap-stock-earnings-russia-exit-51650616243.