In today's Cloud Wars Minute, I compare Oracle, Microsoft, Google Cloud, and AWS through the lens of backlog growth and future demand.

Highlights

00:02 — I talked last week a little bit about Oracle's Q4 results, very strong across the board. I wanted to go into a little more detail today about one number in particular: its RPO, remaining performance obligation. That's contracted business not yet recognized as revenue.

00:18 — Some people refer to it as RPO. It's also known as pipeline or backlog. But with what Oracle reported for Q4, its AI and cloud backlog, pipeline, or RPO is now the largest in the world: $638 billion. It's even bigger than Microsoft's. This reveals a lot about who's got momentum into the future.

01:02 — So, as I said, Oracle's RPO for the quarter ended May 31 was $638 billion, up 363%. A couple of months ago, when Microsoft reported its fiscal Q3 and calendar Q1 numbers for the period ended March 31, it reported RPO of $627 billion, up 99%. So, Oracle beats them slightly on total RPO, but look at the difference in the growth rate: 99% versus 363%.

02:20 — But when we flip the arrow of time from the recent past, which revenue reflects, into the future, that's where we see Oracle is just winning an outlandish share of the business going forward, even more than Microsoft. We're seeing more and more of that pipeline, or RPO, over time convert to revenue for both of these companies.

03:40 — These are multiplier effects, and again, my point here is about who's growing faster and who is moving into leadership positions going forward. Clearly, as Microsoft and AWS led the first chapter of the cloud, here in the AI chapter, the leaders jumping out in front, growing faster, and finding new ways of doing things are Oracle and Google Cloud.

04:12 — Speaking of AWS, how does it fit into this whole RPO tale of the tape? AWS refers to this as backlog, and in its most recent quarter, ended March 31, it said that its backlog was $364 billion, up 49%. For Google Cloud, its backlog is $462 billion, growing at 98%. So clearly, all three companies are outperforming AWS in this backlog/RPO space.

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