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Don’s recent attempt to look at financials of 10 publicly traded “cloud” companies got me willing to expand his research to a bigger picture.

After all, limiting the scope to 100% cloud companies really skews the charts to “Salesforce.com and everyone else” leaving such cloud juggernauts as Amazon and Google out of the picture.

As Don notes, Salesforce.com is doing extremely well: in Q1 2011 the company demonstrated 34% year-over-year growth rate and made $504 million in revenue. Their 2010 revenue was about $1.66 billion.

Companies like Google and Amazon are indeed much harder to analyze. Neither of them discloses cloud-related revenue which sort of vanishes in the grand scheme of core business such as respectively online advertisement and retail.

In this blog post I decided to have a look at where these two cloud businesses stand.

Amazon

In August 2010, UBS Investment Research estimated that Amazon Web Services were on track to make $500 million in 2010 (up from $275 mln in 2009), and $750 mln in 2011 (out of total $44 bln revenue of Amazon as a whole). By 2014 they are expected to get to $2.5 billion.

Profits are estimated to be around $58.2 million in 2010, $100.7 million in 2011.

As a side note on the Infrastructure as a Service space, Rackspace is considered to be number 2 cloud provider and they are way behind Amazon with target revenue for 2011 set to $100 mln (for cloud services).

Google

Google Apps is Google’s core subscription cloud service, and again a small fraction of the total company’s revenue (and with Android’s success no longer the most cherished ‘secondary business’ either).

The latest interview with Google Enterprise (which includes Google Apps) boss – David Girouard does not say much:

3,000 business are moving to the suite each day, and over three million have moved since its debut in 2007. But it’s unclear how much revenue Google is generating from subscriptions. All we know is that it’s under $1bn a year, less than four per cent of the company’s overall revenue. The aim, however, is to create a multi-billion-dollar business – in the near term. “Not a decade from now,” Girouard said, “but within a few years.”

Obviously ‘under $1 billion’ is a huge range.

A year ago, in May 2010, Nikesh Arora, president of Google’s Global Sales Operations and Business Development provided more detailed information:

First of all, back then the number of customers was one-third lower: “There are 2 million small businesses that have signed up”.

And secondly he provided a date estimate for reaching the $1 billion mark: “In perhaps three- or four years, I hope it will be more than a billion dollar revenue stream.”

With that kind of growth, to get to a billion dollars in 3 years, Google Apps need to be making  $300 million in revenue a year at the moment. On the other hand, when Google Apps were claiming 1 million users in early 2009, their revenue target for the year was $40 million. So with 3 times more users today, they might very well be at the 3 times the revenue – $120 million a year for Google Apps. My guess, is that the broad range ($120-$300 mln) might be related to them including or excluding advertisement revenue coming from free Google Apps accounts.

Anyone else?

I am actually quite impressed with how revenue of Salesforce.com compare to cloud businesses of Amazon and Google.

For now I would probably just limit the analysis to these 2 vendors. Microsoft is trying hard to get into this business with their Office 365 and Windows Azure launches. However, to be fair to the company I would probably wait another year before discussing their financial performance.

And that’s just for the software vendors. IBM‘s CFO Mark Loughridge claims that cloud services will generate $7 billion in revenue for his company by 2015, and I am pretty sure that hardware vendors are not losing money on shipping servers to all the new cloud datacenter either.

Have I missed any of the big players you would have expected to see in this analysis? Let me know.

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The Experts Conference 2009 web site TEC 2009 (Las Vegas March 22-25) agenda is almost complete now and it seems to be biggest show since PDC (Professional Developers Conference) last year on which Microsoft and their key partners will talk about Azure, Exchange Online and other “cloud” platforms.

Also, while PDC was mainly dev-oriented – this is going to be first one oriented on IT professionals, system integrators and architects.

Here are the sessions which caught my attention:

Directory track:

This Cloud Has Roots: A Peek Into Microsoft’s Global Foundation Services AD Infrastructure by Sean Deuby (Microsoft MVP, Windows IT Pro Magazine contributor, and Enterprise Solutions Strategist with Advaiya).

Federating with the Cloud by Randy Wiemer (Architect at Oxford Computer Group – the main system integrator for Microsoft’s identity management solutions.)

GALSync and Federation in Exchange Online by Craig Martin (Director of Identity Architecture at Oxford Computer Group.)

Implementing an Identity based solution using Microsoft’s new Cloud based infrastructure by Danny Kim (CTO at FullArmor, Microsoft MVP) – Danny is telling me this will be basically a session on identity in Windows Azure based on their experience moving PolicyPortal to Azure.

Identity Integration: Multiple Directories in Cloud by Patrick Harding (CTO at Ping Identity – these guys know about identity federation in the internet probably more than anyone else!)

Exchange track:

Modern Techniques for Large Scale Exchange Environments Keynote by Konstantin Ryvkin (Konstantin is a Sr. Technology Architect in the Microsoft Business Collaboration Services Group a team which provides Exchange based hosted messaging services to Microsoft IT and other enterprise customers – really looking forward to this one!)

Exchange 2007 and its Web Services byIlse Van Criekinge (Global Knowledge)

Software + Services Integration with Microsoft Live by Richard Wakeman (Senior Consultant with Microsoft Public Sector Services.)

These are the sessions on my must-attend list. Looks like, as usual, TEC organizers managed to get a very impressive line-up of speakers and sessions. I have attended TEC (previously called DEC – Directory Experts Conference) before and based on my experience this has always been the most deep and cutting edge conference on Microsoft’s directory technologies you could find – far ahead of general purpose events like TechEd.

Registration and details can obviously be found at the conference web site.

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