Gartner Inc. has called out supposed “cloud vendors” for doing what everyone has known for years – creatively cooking the books to inflate their cloud-associated revenues.

Gartner made its accusations in a paper called Vendor Cloud Revenue Claims — Should Enterprises Care? where it makes the case that enterprises really should care about vendor cloud revenue claims, because they’re coming up all kinds of fancy accounting methods to inflate the success of their cloud businesses.

Gartner cites a number of methods that vendors are using to cook their cloudy books. Microsoft, for example, says its cloud revenues are those derived from Azure, Dynamics CRM and Office 365, but its definition isn’t really all that accurate. That’s because Office 365, which pulls in a large chunk of Microsoft’s $8.2 billion annual cloud revenues, also includes revenues taken from the sale of regular, boxed versions of Office for the desktop or other devices. Microsoft tries to disguise it by lumping in cloudy products like OneDrive storage, but at the end of the day it is not really a cloud service and there is no guarantee that these cloud features are being used.

As for IBM, it recently said it had raked in $9.4 billion in cloud revenues “over the trailing 12 months”. Conversely, the company also says its achieved an annual run rate of $4.5 billion for its “as-a-service” products. Confused? So are we.

Other vendors are at it too. Gartner says Salesforce.com, Inc., sells dedicated hardware to some customers but lumps these revenues together with its “Software-as-a-Service” earnings, while Oracle’s Infrastructure-as-a-Service sales also include some hardware leases. That’s not cloud.

Why are vendors doing this? Gartner suggests two reasons – first they want to impress their customers and show off that they’re a ‘cloud leader’, and second, they feel a need to prove to investors on Wall Street that there clouds are a successful business model with a great future.

The bottom line is that customers shouldn’t trust vendors when they fire off cloud revenue numbers as a way of trying to impress them. Instead, Gartner recommends they ask quite a few questions of potential vendors before making a decision to buy one or another’s cloud services.

These questions include asking which revenues are cloud-associated, which non-cloud services are included in their cloud revenues, and how much of their cloud business is actually being deployed versus cloud shelfware or services not in use. By asking such questions, customers will be better able to establish if vendor’s numbers are realistic or not.

Image credit: StockSnap via pixabay.com