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If there were any lingering doubts that cloud server spending has jumped in March and April, AMD (AMD) and Samsung Electronics' earnings reports and calls should put them to rest.

AMD, whose Epyc server CPU business has been a key growth driver in recent quarters, reported that its server CPU unit shipments rose by a double-digit percentage sequentially and more than tripled annually. The company also forecast that Epyc sales would see strong sequential growth in Q2.

Though supercomputer deals and other high-performance computing (HPC) engagements are providing some lift as well, CEO Lisa Su noted that AMD saw "a very nice acceleration" in its server CPU sales to cloud giants (the proverbial hyperscalers) over the course of Q1, as clients added capacity to help support the usage spikes they've seen for various apps and services amid COVID-19 lockdowns. This acceleration helped drive strong CPU unit growth, albeit while pressuring average selling prices (ASPs).

Su also said that one major cloud client "was able to deploy 10,000 second-gen Epyc servers in less than 10 days to support the surge in demand for their collaboration services." There's a good chance that the client is either Microsoft (MSFT) or Alphabet/Google (GOOGL) , given the demand spikes that they've reported for their respective collaboration offerings.

Samsung, by far the world's biggest DRAM and NAND flash memory maker, reported that its memory sales rose 15% annually in Q1 to KRW13.14 trillion ($10.8 billion).

And -- in remarks that appear to have helped rival Micron's (MU) stock rise more than 9% on Wednesday -- Samsung forecast DRAM and NAND sales would remain strong in Q2, as strong demand from server memory clients and "steady" demand from PC clients offset weaker smartphone-related demand.

AMD and Samsung's comments arrive less than a week after Intel (INTC) reported that its server CPU division (the Data Center Group, or DCG) saw its sales to cloud service providers rise 53% annually in Q1. Intel also forecast that cloud demand would remain strong in Q2, and said it was optimistic that this strength would continue into Q3.

Others, such as Micron, Nvidia (NVDA) and SK Hynix, have also reported seeing strong cloud-related orders to varying degrees.

There is some risk that demand could soften in the back half of the year, particularly given that cloud capex has been fairly cyclical in recent years and was already on the upswing before COVID-19 lockdowns arrived.

The easing of lockdowns could lead the usage spikes recently seen for many apps and services to at least partly reverse, and the top-line pressures that some tech giants are seeing could also weigh on capex. It's worth noting here that Google, which is dealing with major ad sales pressures, said it expects "a moderate reduction" to its 2020 data center capex plans relative to the start of the year, albeit while still indicating that server spend would be up.

Also, prolonged macro pressures would probably weigh on traditional enterprise server demand, which in turn could offset higher cloud-related sales. Intel cautioned last week that it expects DCG's sales related to enterprise and government end-markets (up 34% in Q1) to soften in the second half of 2020.

Nonetheless, for now at least, COVID-19 lockdowns are proving to be a net positive for server chip demand, in large part due to the strain these lockdowns have placed on cloud data centers. And as Google and others have suggested, there's a good chance that a lot of the usage jumps that have been seen for both consumer and business apps/services won't entirely reverse once lockdowns end.

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AMD and Samsung's Earnings Point to a Cloud Server Spending Boom - TheStreet

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IT budgets for AI, cloud, and security are increasing in 2020, according to a survey by the Enterprise Strategy Group

In 2020, more than 50% of IT enterprises expect to increase IT budgets and add 3.2% to spend on average, according to a survey from The Enterprise Strategy Group. The survey is based on over 650 senior IT decision-makers from different enterprises across the globe that have played a critical role in creating the 2020 IT budget and spending plans.

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As per the report, healthcare and technology were the top industries that are expected to increase their IT budgets in 2020. Organizations expect artificial intelligence and machine learning, cybersecurity, and cloud to lead spending increases. Spending on servers is dropping at 35% and 37% on endpoint devices, respectively. The respondents think there will be an increase in spending in these categories; however, the budgets in those categories will remain relatively flat.

According to the report, there is a rise in spending on advanced and more agile technologies as organizations are striving to phase out traditional technology stacks. IT decision-makers project a substantial decrease in spending on servers, endpoint devices, and converged or hyper-converged infrastructure platforms. With IT budgets increasing year-over-year, enterprises are maintaining investments in core infrastructure areas, including databases, storage, and network infrastructure.

Companies are also increasing their budgets for spending on security and other digital technologies that will help them tweak the way business technology stacks operate. As companies maintain on-premises spending, they are allocating more resources to service-based technologies, found the survey. Organizations are collecting and analyzing more data. Nearly 40% of respondents mentioned data volumes are driving higher IT spending. Two-thirds of IT decision-makers surveyed said the IT stack is growing more complex than it was two years ago.

COVID-19 Financial Crisis Best Time to Start with a Blank Slate

Enterprises need to focus on decentralized spending, where other departments are increasing technology investments outside of the CIO purview. It is important to ensure the increasing investment will fit into a portfolio. Companies can maintain investments in traditional storage technologies; however, increasing cloud spending could create portfolio redundancy and wasted investments.

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Organizations are Increasing IT budgets for AI, Cloud, and Security - EnterpriseTalk

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While some areas of Alphabet have struggled during the COVID-19 crisis, Google Cloud continued to be a cash cow in Q1. Google Cloud, which includes Google Cloud Project (GCP) and G-Suite, generated $2.78 billion in revenue in the first quarter, which marked a 52% increase over the same quarter a year ago.

While Google doesn't break out Google Cloud Project's revenues separately, it's a safe bet that a large chunk of its first quarter revenue came from the cloud. Google Cloud posted $8.92 billion in revenue for all of 2019 and $2.61 billion for the fourth quarter. Google Cloud's revenue increased 53% in the fourth quarter.

With the new numbers, Google is on pace for a run rate of $10 billion in annual revenue this year.

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Alphabet's after market earnings report on Tuesday marked the second time that Google has broken "Google Cloud" out as a line item that includes all of the company's cloud computing business.

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While Google Cloud posted a large year-over-year jump in revenue, Amazon Web Services and Microsoft Azure still have their earnings reports forthcoming.

"Once again, the growth rate of GCP was meaningfully higher than that of cloud overall," said Alphabet CFO Ruth Porat, according to a Seeking Alpha transcript. "GCP growth was led by our infrastructure offerings in our data and analytics platform.

"With respect to the implications of the global crisis for Google Cloud, were proud of the accelerated traction we achieved across sectors, including public sector and healthcare for disease monitoring and control, working with leading retailers on demand forecasting working with companies across media and communications to enhance their customer service and across industries on supply chain optimization."

Porat also said that Alphabet would slowdown the pace of hiring new employees and the rate at which it acquires new office buildings this year. Google plans to spend more capex on servers than data centers this year. Overall, Alphabet/Google is planning a slight decrease in capex for the remainder of the year.

"We are taking a long view and continuing to invest in our long-term priorities, but are being thoughtful in the short-term," said Alphabet and Google CEO Sundar Pichai during the earnings call. "So we made the decision to slowdown the pace of hiring in the reminder of 2020, while maintaining momentum in a small number of strategic areas.

"We are also recalibrating the focus and pace of our investments in areas like data centers and machines, and non-businesses essential, marketing and travel."

Pichai said Google Meet, which is the company's video conferencing platform, is adding roughly 3 million users each day and that it has seen a 30-fold increase in usage since January. Pichai said there are now more than 100 million daily Meet video conferencing participants.

Google Meet competes against other video conferencing platforms such as Zoom, Blue Jeans, which was recently bought by Verizon, and Microsoft Teams.

On Wednesday, Google announced that Meet was now available for free until September 30, but users need to have a Google account. Previously, users needed a paid-for G Suite account to use Meet. Google is allowing up to 100 users to be on a Meet video conference, but it said at the end of September it could restrict the meeting length to 60 minutes.

Alphabet reported revenue of $41.2 billion in the first quarter while analysts had predicted $40.3 billon. Alphabet posted earnings per share of $9.87 compared to analysts' average of $10.38.

While "search" was up to due to people seeking more information on COVID-19, ad revenues were down. Porat summed up the first quarter as a "tale of two quarters" as the impact of the coronavirus increased in March.

"For our advertising business, the first two months of the quarter were strong," Porat said. "In March, we experienced a significant and sudden slowdown in ad revenues. The timing of the slowdown correlated to the locations and sectors impacted by the virus and related shutdown orders.

"For the second quarter so far, I think its premature to gauge, given uncertainty in the environment, and a few weeks, obviously, is not a quarter. So in such an unprecedented crisis, I would not want you to extrapolate from just a couple of weeks."

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In the first quarter, Google Cloud's revenue is up 52% year-over-year - FierceTelecom

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Global tech giant Amazon may not be able to protect Australian Government data held in its Australian servers including data gathered by the COVID-19 tracing app released on Sunday from US subpoenas, according to legal experts and crossbenchers.

The COVIDSafe app is designed to help identify who a COVID-19 positive person has met while infected, speeding up the contact-tracing process.

The Government has defended its decision, revealed last week by the ABC, to award the app's data-storage contract to Amazon cloud subsidiary Amazon Web Services (AWS), a US-incorporated business subject to the US CLOUD Act.

The CLOUD Act is a 2018 US law which requires American cloud services to produce, under subpoena, data held by them regardless of where in the world that data is stored.

The Australian Government initially told ABC News data held by Amazon would be protected from the CLOUD Act, but Australia's peak legal body, the Law Council, disagreed, saying that under current arrangements the appeal avenues under the CLOUD Act "would not have application" in Australia.

The Government has also pointed to a Ministerial Determination issued on Saturday by Health Minister Greg Hunt, which it says will also protect the data. The Law Council and two crossbenchers said that was not certain.

The federal crossbenchers told ABC News they were concerned the Government had created an uncertain legal situation around the COVID-19 app.

"I think the application that has been proposed by the Government, and that is now available for download, is a useful application and it will help to save lives, however there are certainly still some grey areas in respect of privacy," federal crossbench senator Rex Patrick said.

"There will be some people in the community who will rightly be a little bit anxious about downloading this application."

The data created by the tracing app will be encrypted, stored on your phone, and not shared with anyone, unless you test positive to COVID-19.

If that happens, health officials may ask but cannot compel you to upload 21 days of your data. If you do, it is at that point your data will be sent to the Amazon cloud.

The Government's contact-tracing app aims to help track down people who may have been exposed to COVID-19, but like any smartphone app, it raises privacy and security questions.

It is only then that the US Government could use the CLOUD Act to compel Amazon to hand over data.

ABC News reported concerns by industry insiders and bureaucrats that giving Amazon the contract could mean COVIDSafe data was obtainable by the US under CLOUD Act subpoena.

The insiders spoke to the ABC on condition of anonymity because they held contracts with the Government, or work for the Government and were not cleared to speak publicly.

The Government rejected the concerns, saying its data held by AWS would be protected because of a provision in the CLOUD Act that allowed US companies to apply to refuse or modify US subpoenas seeking the data of foreign governments, if providing such information violated the law in that foreign country.

However, such appeals are only available if a country is designated under the US CLOUD Act as a "qualifying foreign government".

A spokesman for the Prime Minister confirmed over the weekend that Australia was not yet designated a "qualifying" jurisdiction under US law but insisted the data would remain in Australia.

"Even without yet being defined as a 'qualified foreign government' under the CLOUD Act, Australia already ensures data from a range of government agencies, including our intelligence agency the Australian Signals Directorate, is kept in Australia," he said.

To be recognised as a "qualifying foreign government", Australia and the US are required to sign a so-called "executive agreement" under the CLOUD Act, which must involve special legislation in Australia.

Negotiations for that agreement were first made public during a meeting between Home Affairs Minister Peter Dutton and US Attorney-General William Barr on October 7 last year.

"This is the way of the future between like-minded countries," Mr Dutton announced in a statement that day.

Mr Barr said: "This agreement, if finalised and approved, will allow service providers in Australia and the United States to respond to lawful orders from the other country without fear of running afoul of restrictions on disclosure, and thus provide more access for both countries to providers holding electronic evidence that is crucial in today's investigations and prosecutions."

The October announcement noted the "bilateral agreement", which would allow Australia to become a "qualifying foreign government" under the CLOUD Act, would be "underpinned by Australian legislation yet to be introduced" into Parliament.

ABC News can confirm the legislation to give effect to the agreement was only put before the House of Representatives in early March and, crucially, the bill the Telecommunications Legislation Amendment (International Production Orders) Bill has not been enacted.

That means Australia has no enforceable protection under the CLOUD Act until the bill is passed, which can occur at the earliest in the middle of next month, when Federal Parliament returns.

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"It is the view of the Law Council of Australia that the review mechanisms in the US CLOUD Act would not have application to information held in Australia's territorial jurisdiction, in the absence of Australia being recognised by the US as a 'qualifying foreign government' under that act," the Law Council's president, Pauline Wright, said.

When the ABC initially reported the concerns about the CLOUD Act, the Prime Minister's office also said the Government's position that the data would be secure was "being reinforced by a declaration under the Biosecurity Act".

That declaration was made on April 25, the day after the ABC's story was published.

The Law Council said the Biosecurity Act declaration may serve to protect the data.

"The fact that it would be an offence under the Biosecurity Act and a breach of our domestic laws is likely to be a relevant consideration to the enforceability of any US-issued warrant in relation to data held in Australia, and Australia's compliance with any mutual legal assistance request by the US for such information," Ms Wright said.

Government Services Minister Stuart Robert and Prime Minister Scott Morrison both used future tense when speaking publicly about Australian government law that would stop the transfer of the COVID-19 tracing app data out of Australia.

On Friday afternoon, Mr Morrison said: "It would it is illegal it will be illegal, for information to go out of that data store to any other person other than that for whom the whole thing is designed."

On Saturday, a spokesman for Mr Morrison again used future tense when discussing the penalties of removing any COVID-19 data from Australia.

"The Australian Government will ensure it is a criminal offence to transfer data to any country other than Australia," Mr Morrison's spokesman said.

"These claims about US authorities are incorrect.

"We're using the same approach we use to protect some of the highly sensitive data of the Australian Signals Directorate as we are for this app."

When contacted for comment, an Amazon spokesman said questions about the CLOUD Act relevant to COVIDSafe data should be referred to the Australian Government.

In 2018, major US law firm Bryan Cave Leighton Paisner wrote an analysis of the CLOUD Act, in which they noted data protections of foreign governments such as Australia may not be enough to stop a lawful US government subpoena.

"Under the CLOUD Act, Microsoft will now be required to hand over to criminal prosecutors in New York emails held on Microsoft servers hosted in Ireland, regardless of the stringent EU data-protection requirements applicable in Ireland," the firm wrote.

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Senator Patrick told ABC News while the COVIDSafe app had a use, he was disappointed the contract went to US company Amazon.

"It's nothing short of an absolute disgrace that this cloud contract was awarded to an overseas company," he said.

"We have in effect just exported Australian dollars to the US, and at the same time, what we've done has caused some concerns in relation to the protection of the data that may be collected by the application."

The Government has yet to explain why Australian cloud service providers which have been security-vetted for precisely such a purpose were excluded from the opportunity to apply for the contract.

Greens senator and digital rights spokesman Nick McKim said the CLOUD Act could apply to the COVIDSafe data.

"People who will be sitting in head office in Amazon in the US will not be covered by Australian law, they will be within jurisdiction of US law," Senator McKim said.

"And the US role is abundantly clear that US security agencies actually do have a claim on data that is held by a US company, no matter where that data is hosted in the world."

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Experts warn there are still legal ways the US could obtain COVIDSafe data - ABC News

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