Cloud Revenue Reports: Is It All Just Smoke and Mirrors?
Recent quarterly revenue reports by cloud service providers have led some experts to ask one very important question: Are cloud revenue reports nothing but smoke and mirrors?
It’s an interesting question that IT research firms have begun asking. Even analysts at Gartner have begun probing for answers.
In a recent report filed on the Gartner website, analysts David Mitchell Smith and Ed Anderson write:
“Assessing vendor cloud revenue claims has become more challenging, with many vendors’ IT-related businesses being complicated and nuanced; we recommend CIOs direct their organizations to never take vendor cloud revenue at face value, and evaluate vendors on their strategy and service mix.”
As Gartner notes, it’s becoming increasingly difficult to tie quarterly revenue to specific cloud products. IBM has posted 15 consecutive drops in quarterly earnings, yet if you drill down into those numbers, their cloud products were thriving. When you segment those numbers even further, it begins to get more complicated.
Other critics believe that some companies may be “Cloudwashing” their press releases and lumping in non-cloud revenue with cloud revenue to make it seem as if their cloud product lineups are soaring in popularity.
While organizations like Amazon Web Services seem to be more transparent than others in terms of reporting their revenues, it’s likely that Amazon is so open about their numbers because they are the market leaders in the public cloud sector.
Other cloud providers may hesitate to release their numbers, perhaps out of fear in regards to the way that those numbers may make the company look to potential investors.
Painting the best picture possible is nothing new in the business world. Cloud businesses will continue to do this until they achieve a position of dominance over a specific market sector.
Should decision makers be concerned about cloud revenues?
The short answer: No.
Evaluate each cloud provider based on their offerings and reputation, not the PR & marketing buzz.
