In a stark departure from his standard practice of not referring to competitors, Microsoft CEO Satya Nadella supplemented his company’s extraordinary fiscal-Q4 earnings results by declaring Microsoft’s clear superiority over other hyperscalers in a range of comparisons to underscore his contention that Microsoft’s still the big dog in the cloud.
The callouts by Nadella come as Google Cloud and Oracle are establishing themselves as the prime innovators in the AI Revolution, and as AWS — in spite of some very strong Q2 results — finds itself losing share to its more-aggressive and fast-growing competitors (for more on that, please see “Q2 Cloud Shakeup: AWS Losing Ground to Microsoft, Google, Oracle“).
In my opinion, Nadella quite intentionally chose to break with tradition by attempting to put his competitors in their places during the Microsoft Q4 earnings call because it was jammed with superb results for Q4 cloud and AI growth, Azure’s accelerating growth and scale, and perhaps most-impressive of all the future demand for Microsoft cloud and AI services as reflected in its hard-to-fathom RPO of $368 billion, up a gravity-defying 37%. (You can watch my analysis of that extraordinary quarter in this recent Cloud Wars Minute:”Microsoft Q4: The Greatest of All Time!!.”)
With that type of credibility at hand, Nadella decided it was time to set the record straight — at least from his perspective — on precisely which of the hyperscalers is most ready to meet the booming and fast-changing needs of customers.
AI Agent & Copilot Summit is an AI-first event to define opportunities, impact, and outcomes with Microsoft Copilot and agents. Building on its 2025 success, the 2026 event takes place March 17-19 in San Diego. Get more details.
The comments during the Q4 earnings call stand out as what I believe will become an inflection point for Microsoft because Nadella rarely refers to competitors and when doing so, offers fairly bland and collegial remarks. Until the recent Q4 earnings call, the closest Nadella has come to knocking competitors is something along the lines of “we once again took share,” but neither he nor CFO Amy Hood, whose devotion to that vague phrase matches that of Nadella, offers any specific details to back up that contention.
But I think the intensity of today’s competition in the Cloud Wars along with the unprecedented market opportunities — the Cloud Wars Top 10 companies have a combined total of more than $1 trillion in RPO — are inspiring Nadella to speak more animatedly about how he views Microsoft’s competitive capabilities here in the greatest growth market the world has ever known.
Near the top of his remarks opening the earnings call, Nadella touched on what he believes is Microsoft’s superiority in a range of areas that Google Cloud, Oracle, and AWS have all been discussing quite vigorously over the past year or so: breadth of AI product portfolio, tech stack, AI infrastructure, number of data centers, capacity of extremely large data centers, and data-center capacity. Here are his comments on each of those subjects:
- AI products and tech stack: “It was a very strong close to what was a record fiscal year for us. All up, Microsoft Cloud surpassed $168 billion in annual revenue, up 23%. The rate of innovation and the speed of diffusion is unlike anything we’ve seen. To that end, we are building the most comprehensive suite of AI products and tech stack, at massive scale.”
- AI infrastructure: “Azure surpassed $75 billion in annual revenue, up 34%, driven by growth across all workloads. We continue to lead the AI infrastructure wave, and took share every quarter this year.”
- Number of data centers: In recent months, both Oracle chairman Larry Ellison and CEO Safra Catz have stated that Oracle will soon have “more cloud regions than all of our competitors combined.” Nadella offered his view on why that ain’t necessarily so: “We opened new DCs across six continents,” Nadella said, “and now have over 400 datacenters across 70 regions, more than any other cloud provider.”
- Multi-gigawatt data centers: In a similar vein, Ellison has spoken in detail about Oracle’s intentions to build massive AI data centers, with that vision growing even more ambitious as Oracle’s relationship with OpenAI has intensified. Nadella brushed such claims away, saying, “There is a lot of talk in the industry about building the first gigawatt and multi-gigawatt datacenters. We stood up more than two gigawatts of new capacity over the past 12 months alone.”
- Data-center capacity: To underscore his broad theme of Microsoft being unrivaled in AI and cloud infrastructure, Nadella also noted that “We continue to scale our owned data center capacity faster than any other competitor.”
Final Thought
As business leaders make momentous decisions in deciding on which AI and cloud hyperscaler to wager the future of their companies, I think it’s entirely appropriate for Nadella — and the CEOs of all the Cloud Wars Top 10 companies as well — to speak clearly and aggressively about the many virtues and attributes of Microsoft. And to do that, it’s sometimes — often? —necessary to put that POV in context for customers by framing it around how well competitors can or cannot match up.
I would like to see more of this in the Cloud Wars — not name-calling and “mother jokes,” but rather fact-based straight talk — because the stakes for customers have become so astronomically high. We’re not talking here about which word-processing app is better, or which transcription app is most accurate (although those things are in their own way quite important).
No, we’re talking about which hyperscaler to select to provide the foundation for competing in the AI Revolution, a trial that will see some companies flourish and thrive while others fall behind and ultimately drop out.
Well done, Satya Nadella!
Related Posts
