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Shopify Says eCommerce is Back. But AWS Says Cloud Under More Scrutiny.


o this was an interesting week in terms of reading the tea leaves on what’s going on in SaaS, Cloud, the economy, and all that.  Pressure is definitely up, yet, unemployment remains at record lows and consumer spending remains strong.

This week we learned two things from the leaders in their categories:

First, eCommerce is Back.  Shopify rocketed to 22% growth this quarter, from 16% the prior quarter.  Few other than Zoom grew faster than Shopify during lockdown, and both crashed hard as the world reopened.  In the eComm world, everyone was wondering — when will we get back to normal?  It looks like we have, and we’re over the Covid Hangover in eCommerce.  I’ve also seen this in the leaders in eComm I’ve invested in, like Gorgias.

But it wasn’t all roses this week in the industry leaders.  The Cloud infra side grew nicely, but growth did slow.

Second, AWS, Azure and Google Cloud all grew nicely, and are still growing like a weed — but the growth rate slowed.  AWS and Microsoft Azure all reported more customers scrutinizing spend and working to manage their bills more carefully.  Google Cloud actually accelerated growth at a $27B run-rate.  Real Growth But With More Scrutiny does seem like the theme of the day in SaaS and Cloud.

So the good news is the bellwethers in SaaS are still growing at strong rates.  eCommerice is back on track, and Cloud overall remains on a tear.  But the pressure is up, as are customer expectations.  Perhaps as it should be.

Published on October 28, 2022

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