Amazon takes a breath, while Microsoft and Google plunge ahead – GeekWire

Cooling towers sit atop a Google data center in The Dalles, Ore., as expansion continues. (GeekWire Photo / Tom Krazit)

Building and maintaining a modern cloud computing service requires billions of dollars in capital expenditures every quarter. Microsoft and Google continued to increase their investments in servers and data centers during the third quarter, while first-mover Amazon Web Services had the luxury of taking time to improve its existing investments.

Google spent $5.6 billion in accrued capital expenditures during its third quarter, up 60 percent from the same period last year, as it tries to catch up to the more established players in this market. Interestingly, over 80 percent of Google’s capital expenditures were spent within U.S. borders, said Google CEO Sundar Pichai on a conference call following the release of the company’s third-quarter earnings results.

Microsoft spent $4.3 billion on capital expenditures during the quarter, “driven by ongoing investment to meet demand for our cloud services” according to Chief Financial Officer Amy Hood. That’s a 59 percent increase from the same period a year ago, and comes as Microsoft moves to expand the number of availability zones within its cloud computing regions, which allow customers to spread their downtime risk across several distinct buildings within a given region.

Amazon’s cloud investments are a little harder to divine, given that the company reports capital expenditures across its entire business, which includes fulfillment centers and robots and massive downtown Seattle construction projects. But Brian Olsavsky, Amazon’s chief financial officer, pointed out on its own earnings call that capital leases related to AWS increased just nine percent during the quarter, citing internal moves to improve efficiency within those data centers.

Intel’s Data Center Group earnings results probably tell the true tale of the race to invest in cloud computing, given the monopoly power it wields over this market. Revenue from chips used to power cloud servers increased 26 percent during the quarter to $6.1 billion, and that’s just a small part of what it takes to build a modern data center.

(Excerpt) Read more Here | 2018-10-26 18:22:14
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