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The AWS and Azure numbers are actual revenue, but the Google cloud number is a ‘run rate’, meaning, pick a particular high point, call that steady-state, and mu

The AWS and Azure numbers are actual revenue, but the Google cloud number is a ‘run rate’, meaning, pick a particular high point, call that steady-state, and multiply accordingly to get an annual rate. I am not doubting Google’s success with GCP. However, they should provide the actual revenue, in addition to the run-rate or whatever other vanity metric they want. Not doing so just makes me wonder about their lack of candor.

eitally 7y ago
I think it's more complicated than that (for all three vendors) because customer contracting can involve all sorts of convoluted terms, especially mega-deals. Using ARR makes more logical sense because it provides a less messy way of accounting for things like guaranteed future consumption commits.
- bogomipz 7y ago
  Interesting, so it's really just a means of smoothing then? Do all three use run rate as their key metric then?
techslave 7y ago
As a public company you wouldn’t exaggerate it that way. An $8bn run rate means $2bn last quarter. We often look at annual numbers so reporting a run rate makes sense. It’s not meant as a deception. Anyway run rate doesn’t project growth so if anything, it’s understating the numbers.
- antiviral 7y ago
  That sounds great- congrats on the impressive growth last quarter. However, it would be more insightful if the earnings report made it clear that the revenue was actually $ 2 BB last quarter in addition to giving a 'run rate.' We would then be able to apply an apples-to-apples comparison with AWS, which made $8.4 BB last quarter, growing 37% from the quarter last year, with a 'steady-state run rate'(no growth) of $33B. That seems straightforward, don't you think? Giving partial info when compared to your peers will only encourage deeper scrutiny. As for the point about ARR in the other comment, it would be good to see how much of the revenue is due to pre-existing commitments vs. on-demand use, but you won't get that just by using a single 'run-rate' number.

eitally 7y ago

I think it's more complicated than that (for all three vendors) because customer contracting can involve all sorts of convoluted terms, especially mega-deals. Using ARR makes more logical sense because it provides a less messy way of accounting for things like guaranteed future consumption commits.

bogomipz 7y ago
Interesting, so it's really just a means of smoothing then? Do all three use run rate as their key metric then?

techslave 7y ago

As a public company you wouldn’t exaggerate it that way. An $8bn run rate means $2bn last quarter. We often look at annual numbers so reporting a run rate makes sense. It’s not meant as a deception. Anyway run rate doesn’t project growth so if anything, it’s understating the numbers.

antiviral 7y ago
That sounds great- congrats on the impressive growth last quarter. However, it would be more insightful if the earnings report made it clear that the revenue was actually $ 2 BB last quarter in addition to giving a 'run rate.' We would then be able to apply an apples-to-apples comparison with AWS, which made $8.4 BB last quarter, growing 37% from the quarter last year, with a 'steady-state run rate'(no growth) of $33B. That seems straightforward, don't you think? Giving partial info when compared to your peers will only encourage deeper scrutiny. As for the point about ARR in the other comment, it would be good to see how much of the revenue is due to pre-existing commitments vs. on-demand use, but you won't get that just by using a single 'run-rate' number.