Enterprise hits and misses - big tech earnings underwhelm, but where do we go from here? Plus: metadata matters, and Meta struggles

Jon Reed Profile picture for user jreed August 1, 2022
Big tech earnings are a mixed bag - what can the numbers tell us about what's next? Meta is a mess, but is this good news for an open Internet? Plus: the future of the office is far from clear. Your whiffs include Facebook choosing AI algorithms over your friends.

King Checkmate

Lead story - Big tech earnings reports are in, so what's next?

MyPOV: Big tech earnings reports were decidedly mixed this week, but can we discern a useful pattern? Start with Amazon. As Stuart reports in AWS still soars as Amazon's retail arm is hit by sector slowdown, but it's another quarter of big losses overall, surging AWS can't make up for suddenly skittish/spendthrifty consumers. The sector-wide retail hit is compounded by gas/energy price hikes. Wall Street sees the upside:

It may have turned in a big loss, but Wall Street sent the Amazon share price up 12%  in after-hours trading. There’s clearly a lot of confidence around the organization and its ability to ride out the current macro-economic turbulence better than many of its rivals.

It's a similar story at Google, where ad revenues via Alphabet are down. Stuart breaks it out in Google Cloud revenues rise, but so do its losses as Alphabet sees growth slow. Google blames "macro-economic uncertainty," and, obviously, it's cloud business is not entrenched enough to earn the kind of investor premium Amazon (AWS) received.

Still, I like Google's ad revenue prospects better than Meta's, which are tied to algorithmic-walled gardens with a big ol' TikTok vulnerability. Stuart covers that sh#tshow off in Ruling the Metaverse proves to be a costly burden as Meta's growth goes into decline for the first time (Sidenote: even though I'm a Metaverse skeptic, this rough earnings report is not really a commentary on that, except that the Metaverse is nowhere near contributing to bottom lines and boosting Meta's revenues, outside of gaming).

It's a similar refrain over at Microsoft: Microsoft Q4 falls short of expectations, but Azure set to drive double digit growth this year. As with Amazon, Microsoft's cloud business is enough to offset the consumer spending blues, at least for investors. Stuart:

Wall Street was commendably calm about numbers falling short of expectations, buoyed perhaps by Microsoft’s forecast that Azure will drive revenue growth by double digits in the coming fiscal year.

Then, closer to enterprise concerns, have have ServiceNow: ServiceNow softens short-term guidance due to macro headwinds, but is bullish on future success. Derek writes:

What’s important is looking at the long-term indicators. Deal sizes increasing. Existing customers expanding their footprint. Strong renewal rates. On these metrics, ServiceNow is looking good for tackling any disruption in the short-term.

We can't read too much into these well-positioned behemoths; I expect the Wall Street treatment of companies not bolstered by cloud infrastructure plays to be a bit gloomier. Recession or not, I count inflation and wallet-guarding consumers as just one headwind at this point. I don't yet see the crisis that would make for truly dire circumstance. In the meantime, Derek's point carries the day: "McDermott is right, whilst some companies may be being cautious this year, what they also know is that reducing investments in digital and technology isn’t the solution."

I'll take that to mean that "tech," as a sector, provides some protection, but not enough to issue a pass for poor execution. I can think of times in tech when you could do well just by hauling out of bed and showing up. This isn't one of those times.

Diginomica picks - my top stories on diginomica this week

Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:

A few more vendor picks, without the quotables:

Jon's grab bag - Martin explores the future of enterprise developers in a low-code era in Being the 'manager of the managers' - platform thinking revisited by OutSystems. Chris applies a critical eye towards the UK's drone dreams/policies in Make way for the drone superhighway, says UK. Bonus points for calling out last mile urban drone delivery as an "absurd concept."

Best of the enterprise web

Waiter suggesting a bottle of wine to a customer

My top seven

Overworked businessman


In 2018, via one of the cheesiest ad campaigns ever conceived, Facebook proclaimed itself  "A place for friends, not for the things that get in the way." Fast forward four years, and, well, TikTok got in the way of Meta. Now, in response, Facebook is indeed putting its AI algorithm right in the way of you and your friends:

I haven't had much satirical fun with DAOs in this column yet. Well, let's rectify that, shall we?

Oh, and there was a viable scientific explanation presented recently to explain the possibility of the "Loch Ness Monster." 

Hey, I'll take good news wherever I can find it. Finally, basketball legend and stellar human being Bill Russell passed away this weekend. On a tribute thread, saw this stunning picture of Russell with Ali and Abdul-Jabbar in their prime:

Nothing guarantees us a pass from the whiffs section, but living well is probably the best defense. See you next time...

If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed

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