Updated from July 24 with additional information.
Alphabet's (GOOGL) Google Cloud Platform faced a tough challenge after Microsoft Corp.'s (MSFT) Azure nearly doubled its cloud revenue in the second quarter. A report from market leader Amazon.com Inc. (AMZN) comes later this week.
Google reported its latest numbers after the market close on Monday showing that its "other revenues" reporting line, which includes Google Cloud Platform, Pixel smartphones and Play app store, grew 42% to $3.09 billion. In the first quarter, Google reported the category grew 49% to $3.1 billion.
On the second-quarter earnings call, CEO Sundar Pichai said that that Google Cloud Platform "continues to experience impressive growth across products, sectors and geographies" and noted that the number of new cloud leads worth at least half-a-million dollars tripled compared to the year-ago quarter. He also pointed to an expansion in the second quarter of a partnership with SAP (SAP) and a new one with Nutanix (NTNX) to integrate their offerings with Google Cloud Platform.
"We see differentiated strengths in machine learning, data analytics, security, and reliability," Pichai said of Google Cloud Platform's competitive position against rivals such as Amazon Web Services and Microsoft Azure.
As cloud rival Microsoft reorganized its sales staff to focus on Azure, Google has bolstered its cloud staff. CFO Ruth Porat said that Google Cloud Platform had the biggest increase to headcount of Alphabet's businesses during the quarter.
Porat and Pichai have given bullish, but somewhat vague, data about Google Cloud Platform's growth. The executives said in the Alphabet's first-quarter report in late April that Google Cloud Platform is one of the company's fastest-growing businesses without giving numbers for the unit.
Microsoft reported blow-out cloud growth Thursday. Microsoft boss Satya Nadella said Azure's revenue grew 97% in its fiscal fourth quarter, but did not specify a dollar amount for cloud computing sales. Azure is part of Microsoft's Intelligent Cloud division, which reported an 11% increase in sales to $7.4 billion for the quarter.
Nadella has been gunning for a bigger share of the cloud market by retooling the company's cloud sales staff through a reorganization earlier this month.