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The cloud drove Q1 results for Google, Amazon, and Microsoft (MSFT, GOOGL, AMZN)

During their earnings calls last Thursday, tech giants Alphabet, Amazon, and Microsoft all acknowledged their cloud computing businesses as catalysts of their Q1 revenue growth.

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During their earnings calls last month, tech giants Alphabet, Amazon, and Microsoft all acknowledged their cloud computing businesses as catalysts of their Q1 revenue growth.

Alphabet's revenue grew 22% year-over-year (YoY) to reach $24.8 billion in the quarter, with $3 billion, or 18% of its Q1 revenue, coming from the segment that houses its cloud business. Amazon's revenue reached $35.7 billion in Q1, with $3.6 billion, or 10% of revenue, coming from its AWS cloud segment. Microsoft posted revenue of $23.56 billion, with $3.6 billion, or 10%, coming from cloud.

Alphabet, Amazon, and Microsoft may have different core products, but all three tech behemoths benefited from their growing cloud businesses. Here’s a breakdown of each company's cloud offerings:

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Expanding cloud offerings not only helps to diversify revenue sources, it also allows each to capitalize on the growing XaaS (Anything-as-a-Service) market. For example, the IaaS (Infrastructure-as-a-Service) market experienced a 38% YoY growth from 2015 to 2016. Additionally, spending on total cloud infrastructure (public and private), is projected to grow annually at a compound rate of 13% to reach $60 billion by 2020, according to the IDC.

The cloud segment will become increasingly important for each of these tech companies as the digital ecosystem moves away from being device-centric and moves towards cloud-oriented solutions wherein products and services can be accessed on a variety of devices from virtually anywhere. This shift will be more pronounced in the years ahead, as consumers and employees seek greater mobility and the Internet of Things brings exponentially more devices into the digital fray.

Cloud computing — on-demand, internet-based computing services — has been successfully applied to many computing functions in recent years. From consumer-facing, web-based productivity apps like Google Docs to enterprise database management suites, the tools businesses rely on are increasingly moving to the cloud.

But developing a cloud strategy is no easy task. Public cloud solutions will likely come to dominate the market over the next decade, but business constraints, such as security concerns and the limitations of existing infrastructure, make it difficult for companies to fully adopt the public cloud right now.

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That means that hybrid clouds,in which multiple cloud implementations (including public and private) are connected,will remain popular for the time being, at least until these constraints are addressed. The tech giants that dominate the IaaS market — Amazon, IBM, Microsoft, and Google — are constantly expanding their offerings to address current business constraints as they compete for market share.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on cloud computing that:

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