Hi, it's Roman Kirsanov from Partner Insight newsletter, where I deconstruct winning Cloud GTM strategies and the latest trends in cloud marketplaces.
Cloud commits reached a record $469B this quarter—adding >$30B in just three months as we race toward the $500B milestone. Today we'll analyze the forces driving this unprecedented growth, including Azure's incredible 39% revenue surge, AWS hitting $123B annual run rate despite supply constraints, and how hyperscalers are scaling AI and agent marketplaces. Plus, the RPO (Remaining Performance Obligation) playbook behind $1M+ deals and your action plan for capturing this opportunity.
But before we dive in, want to turn these $469B in commits into your revenue? Join Cohort 12 of our Cloud GTM Leader course starting September 9th and learn from leaders who built these winning marketplace playbooks. Secure early bird pricing before it disappears.
Cloud Commits Reach $469B, with~$30B Added Last Quarter Alone
Future cloud committed spending hit $469B across hyperscalers—more than the combined market value of Shopify, ServiceNow, and CrowdStrike. This quarter's ~$30B surge accelerates us toward the $500B milestone we predicted, while hyperscalers call it "still early."
The Big Three Side-by-Side:
AWS
Commits: $195B (+$6B in Q2)
Annual Run Rate: $123B
Revenue Growth in Q2: 17.5% YoY
Notable: AWS Marketplace evolution into an AI distribution hub for agent discovery and deployment. Its recently launched "AI Agents and Tools" category features 800+ pre-built solutions from partners like Anthropic, IBM, and Salesforce.
Microsoft Azure
Commits: $165.6B (up $20B+ from last quarter**).
Annual Run Rate: $75B+
Revenue Growth: 39% YoY
**NB: I revised Azure share to 45% of Microsoft total backlog, based on CEO Satya Nadella's comments about Azure's run rate (and its share in Microsoft Cloud).
Notable: Microsoft's stunning 39% Azure growth and AI momentum. Microsoft processed "over 500 trillion tokens this year, up over 7x" through Azure AI Foundry APIs – what Nadella called "a good indicator of true platform diffusion beyond a few head apps."
Google Cloud
Commits: $108.2B (+$15.8B in Q2)
Annual Run Rate: $50B+
Revenue Growth: 32% YoY
Notable:
Gemini usage grew 35x YoY across 85,000+ enterprises showing adoption of AI workflows. "Over 1 million subscriptions have been booked for AgentSpace ahead of its general availability," Sundar Pichai emphasized.
AgentSpace interest highlights the appetite for AI agent usage. AgentSpace is GCP’s platform for AI agents, chat, and search. Its Agent Gallery has integration into Google Cloud Marketplace, pulling in partner-developed agents for seamless deployment.
Accelerating Ecosystems & Infrastructure Arms Race
Combined annual run rate approaches $250B with backlog representing nearly 2 years of future revenue—exactly our predicted trajectory toward half a trillion commits by end-2025.
Hyperscalers are building at unprecedented scale to capture AI demand. Amazon poured $31.4B last quarter, while still being supply-constrained. Microsoft guided next quarter to "over $30 billion" and Google upped FY2025 CapEx to ~$85B.
This infrastructure buildout will directly accelerate these ecosystems and their partner opportunities. More capacity means more customers, better performance, and expanded marketplace and co-sell opportunities for third-party solutions.
Key Alliance Imperatives:
Marketplace strategy becomes critical: With $469B in committed spend, your marketplace strategy determines access to this massive pool.
Partner ecosystem focus: Hyperscalers are investing heavily in partners to capture AI demand and maximize ecosystem value.
As hyperscalers are growing faster than ever and partners becoming critical to ecosystem success, how are you positioning for this half-trillion-dollar opportunity?
Now, let’s break down growth and key insights from each hyperscaler. As we covered GCP last week here (note that I slightly updated GCP commits number in the current post), I’ll focus on Azure and AWS below.
Azure's 39% Record Growth Takes Microsoft Closer to $4 Trillion
Microsoft shocked Wall Street last week with Azure's 39% growth pushing the company briefly over $4 trillion in market cap. But the real story is the massive backlog surge amidst AI boom, signaling we're only in the "middle innings" of cloud adoption.
The Azure Growth Engine Fired on All Cylinders
Microsoft's Cloud reached a $168B run rate, while Azure itself grew significantly ahead of expectations.
CEO Satya Nadella highlighted 3 key drivers: migrations, cloud native applications that are scaling, and new AI workloads – all building on each other.
The migration story remains massive. Nadella emphasized they're "not anywhere close to the finish line – if at best maybe in the middle innings" of cloud adoption. Nestle's recent move of "200 SAP instances, 10,000+ servers, 1.2 petabytes of data to Azure" exemplifies the scale of shift and what’s still ahead.
Commercial remaining performance obligation jumped to $368B, up 37% – representing $53B in new contracted business this quarter alone.
Assuming Azure's proportional share mirrors its ~45% of Microsoft Cloud revenue, that suggests a new high of ~$165B in Azure commits.
AI Platform Reaching True Scale
AI momentum now extends far beyond hype. Microsoft processed "over 500 trillion tokens this year, up over 7x" through Azure AI Foundry APIs – what Nadella called "a good indicator of true platform diffusion beyond a few head apps."
Copilot applications now serve 100M+ monthly active users across commercial and consumer segments.
Capex Investment Matching Unprecedented Demand
Microsoft guided Q1 CapEx to "over $30 billion" – a significant jump from $24.2B last quarter.
CFO Amy Hood justified this with a contracted backlog: "we have $368 billion of contracted backlog we need to deliver." Even after building "more than 2 gigawatts of new capacity over the past 12 months," demand remains constrained through H1 of this calendar year and they expect this to be the case until January at least.
What this means for Cloud GTM Leaders
Migrations window is wide open – Microsoft sees "middle innings" opportunity across migrating to cloud VMware, SAP, and on-premises workloads
AI workloads driving cloud consumption – companies "come for AI but stay for more than AI" highlighted CEO
Contract sizes expanding – growth in both "$10 million and $100 million plus contracts"
Platform stickiness increasing – multi-model AI strategy through Foundry creates deeper customer integration
Record value of cloud commits and customers' ability to use 100% of them on Microsoft Marketplace for eligible solutions, there is a unique opportunity to grow on this platform
After-hours trading on the earning call day pushed Microsoft's market cap toward the $4T threshold. With Azure alone a $75B business growing 39% in Q4, hyperscaler dominance in enterprise AI transformation continues accelerating.
If Azure were a standalone company, it would rank among the world's fastest-growing mega-corporations.
Are you on Azure marketplace?
Join 250+ alliance leaders who’ve mastered cloud marketplaces of Azure, AWS and Google Cloud with our Cloud GTM Leader course. Our alumni are closing $MMs in marketplace deals and scaling fast. Cohort 12 starting on September 9th!
Now's the perfect time to secure early bird pricing before it disappears soon.
$123B Revenue Run Rate, Yet "Still Early" Says Amazon CEO
AWS reached a $123B annual revenue run rate this quarter—yet CEO Andy Jassy stressed it's "still early." With customer cloud commitments reaching $195B (up 25% YoY) and more demand than supply, the growth momentum is strong.
"How often do you have an opportunity that's $123 billion of annual revenue run rate where you say it's still early. It's a very unusual opportunity that we're very bullish about." - Andy Jassy, Amazon CEO
$195B in Customer Cloud Commits
Amazon Web Services (AWS) grew 17.5% YoY in Q2 despite being supply-constrained. "We have more demand than we have capacity right now," Jassy revealed, with power being the primary bottleneck over chips.
This constraint will persist "several quarters" as AWS poured $31.4B in Q2 capex to catch up.
Enterprises keep signing commitments, growing AWS backlog to $195B in Q2. That's customer obligations that can fund both AWS services and third-party software via its marketplace.
Will Data Gravity and Cost Win in AI?
When asked if AWS is keeping pace with AI innovations and competition, Jassy highlighted structural advantages.
"It is so early right now in AI," he emphasized. While training costs dominate today, "80 to 90% of the cost will be in inference" at scale. "You only train periodically, but you're spitting out predictions and inferences all the time."
AI inference will become "just another building block like compute, storage and database," i.e. customers will want applications running cost effectively and "close to where their other applications are running, where their data is."
With more enterprise applications and data on AWS than anywhere else, this creates natural gravity.
The Great Infrastructure Flip
"85 to 90% of worldwide IT spend is still on premises versus in the cloud. In the next 10 to 15 years, that equation is going to flip, further accelerated by company's excitement for leveraging AI."- according to Amazon CEO.
In this shift, AWS is positioning across the entire AI stack, from custom silicon (Trainium powering Anthropic's Claude 4) to application-layer tools like Bedrock AgentCore for enterprise agent deployment.
AWS is betting on making AI accessible
The earnings highlighted AWS Marketplace's evolution into an AI distribution hub for agent discovery and deployment. Its new "AI Agents and Tools" category features 800+ pre-built solutions from partners like Anthropic, IBM, and Salesforce.
Massive CapEx Investments
Andy Jassy highlighted AWS's significant cloud market lead with the nearest competitor being 65% of its size.
With Q2's $31.4B capex "reasonably representative" for the H2 2025, AWS is committing $120B+ annually to maintain infrastructure and AI leadership
Alliance Imperative
The combination of strong growth, ecosystem size and massive committed spend creates both opportunity and urgency to position your solutions in AWS ecosystem—whether through marketplace, co-sell, or technical integration.
What's your strategy?
How commits/RPO Actually work: What’s behind $1M+ cloud deals
Alliance leaders who don't understand customer commitments/RPO are leaving millions on the table. Especially cloud commits with AWS, Azure, and Google Cloud that are largest, fastest-growing customers IT budgets. Let's break this down.
Two slides—from Okta and Snowflake (which also closely track their own customers commits)— explain the entire financial RPO engine from contract signature to cash recognition.
Understanding the Remaining Performance Obligation (RPO) mechanism is also key to unlocking major deals through cloud marketplaces.
Building the Commitment Pool
First - how the commitment pool is created. The Okta slide shows the 'inflow'. It's a combination of sales activities that build a company's contractual future revenue:
New Customers: Landing a new enterprise account
Upsells: Expanding the service with an existing customer
Renewals: Securing the relationship for another term
The total value of these non-cancellable contracts creates the RPO. Think of RPO as a big, guaranteed pool of future revenue that the customer has committed to spend. Okta’s slide also highlights Current RPO —the portion of that pool to be recognized in the next 12 months, which is what CFOs watch like a hawk.
Spending Commits & Recognizing Revenue
So, how does that giant RPO pool get spent? Snowflake’s slide shows the 'outflow'—the simple but powerful Book -> Bill -> Consume cycle.
After the deal is booked (Step 1) and billed (Step 2), the customer starts to "Consume" or "burn down" their commitment (Step 3). For every dollar of service they use, a dollar moves from the RPO pool to the vendor's recognized revenue.
Cloud Marketplace Game-Changer
RPO isn't just a SaaS vendor model; it's the same mechanism behind Amazon Web Services (AWS) Enterprise Discount Programs (EDPs), Microsoft Azure Consumption Commitments (MACCs), and Google Cloud CUDs.
And here is the critical insight for every alliance leader:
In the world of top 3 hyperscalers, this "burn down" phase is your single biggest opportunity.
Because they allow customers to burn down these massive commits by purchasing your software on their marketplaces (25% of total on AWS & GCP, 100% on Azure).
This transforms a customer's rigid cloud budget into a flexible fund that can include your solutions. It's the major shortcut for traditional procurement cycles and tapping directly into the largest pre-approved budget your customer has.
The numbers from all 3 hyperscalers prove it: companies selling via marketplaces see higher close rates/deal sizes.
Your Action Plan for Cloud Marketplaces
Start seeing these cloud commits for what they are: your fastest path to revenue.
Map prospects' active cloud commitments before/during pitching
Build co-sell plays to help customers optimize commit burn
Help hyperscaler sellers show customers how purchasing your product help to burn commits (+ get better cloud discount)
What's your strategy for turning cloud commits into your revenue?
Join Cohort 12 of Cloud GTM Leader (Sept 9) to Unlock Marketplace Growth
While many companies struggle with growing on cloud marketplaces, our alumni results are truly inspiring: many grew from $0→$M, others scaled $M→$MM in marketplace revenue, some achieving 4X+ YoY growth.
I'm thrilled to invite you to join Cohort 12 starting on September 9!
We recently celebrated our milestone tenth cohort, but with so much momentum and innovation happening in cloud marketplaces, we're just getting started.
Our Cloud GTM Leader course has grown into the industry's leading program for mastering cloud marketplaces, with 250+ alumni accelerating their growth on Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
Why is it more relevant today than ever before?
The playbook to grow on cloud marketplaces isn't obvious and constantly evolving.
Cloud commitments hit a record high $469B and are on track to reach $500B this year.
PLG, free trials, and co-marketing with hyperscalers are becoming more critical than ever.
The AI agent explosion is rapidly accelerating cloud adoption and turning marketplaces into "everything stores" for SaaS, data, and agents - right before our eyes.
That's why we've been partnering with 50+ exceptional speakers and mentors who share their actual battle-tested strategies in our courses.
Why join Cohort 12?
Learn directly from VPs of Partner of the Year winners, hyperscaler experts and our incredible mentors
Master co-sell tactics that drive real pipeline ($0 to $200K+ in sales and $7M pipeline in 8 weeks for one alumni, who since then scaled on marketplaces)
Get practical frameworks to get your entire org on-board and accelerate cloud GTM together
Join a growing community of 250+ cloud alliance leaders
But don't just take my word for it.
Here's what our recent alums highlighted:
"I came in knowing almost nothing and now I feel equipped to have in-depth conversations with leadership and stakeholders."
"The highlight was learning a clear, actionable GTM framework and how to align teams around cloud buyer needs through ecosystem partnerships."
Our alums loved the "open discussion with peers from different business functions and companies covering SaaS, Cybersecurity and Hyperscalers" and the "tactical elements and measurement tools to measure progress."
"People with real experience sharing the how - how did they win, how did they fail, how did they tackle challenge X or Y."
"Finding Partner Insight's Cloud GTM Leader course was exactly what I needed. Roman is so well connected, bringing key players across AWS, GCP and Microsoft. I really appreciated hearing from both large and small companies on their selling journeys in the marketplaces."
Ready to transform your growth on cloud marketplaces? Join our Cohort 12 starting September 9th
Don't miss your chance to join this program recognized by Jay McBain of Canalys as a Top Education Program for Channel & Partnership professionals.
Amazing numbers! Growing so fast… thanks for keeping us updated 🙏