Microsoft anticipates double-digit revenue and operating income growth in F2023. For Q1/F23, Microsoft expects solid but moderating growth in Productivity and Business Processes (includes Office/Microsoft 365) and Intelligent Cloud (includes Azure).
GCP growth remains healthy. Alphabet also reported its Q2/F22 results yesterday. Google Cloud revenues grew 36% y/y, down from 44% last quarter, partly due to a tough y/y comp and FX. GCP growth again exceeded Google Cloud's growth.
Good quarter from IBM. Last Monday, IBM reported Q2/F22 revenue of US $15.5bln, up 16% y/y in cc. Software revenue growth remained solid (up 12% y/y in cc), but Red Hat growth slowed (up 17% y/y in cc vs. 21% in the last two quarters). Infrastructure revenue rebounded (up 25% y/y in cc), aided by the z16 launch. F2022 revenue guidance was maintained.
Our take. We believe the deceleration in cloud growth this quarter is worth monitoring, with Microsoft expecting a continued moderation in Azure growth in Q1/ F23, given its large install base. Given Softchoice's strong competitive position, we believe it can continue to gain market share to help mitigate a potential slowdown in cloud growth from its current lofty levels.
Despite slowing growth this quarter, we believe that key tech vendors' Q2/C22 results and outlook reflect robust customer demand. However, we remain wary of potential near- to medium-term headwinds, including a more challenging macro environment, IT supply-chain issues, and FX.