Recently I came across an article on Forbes about enterprise cloud market which is misleading in a way. The whole article was based on the below numbers which were released officially by the respective companies. As per the below numbers, Microsoft is the biggest cloud player followed by Amazon and IBM. Google is ranked the last among the list behind Oracle and SAP.
The main problem behind this comparison is how each of the company defines “Cloud revenue”. Amazon reports its AWS numbers separately in their financial results, so it is easy to consider the whole AWS numbers as Amazon’s cloud revenue. When it comes to Microsoft, we don’t have any information on how much revenue Azure brought in last quarter or last year. Microsoft reports commercial cloud revenue and it includes other enterprise cloud services in addition to Azure. So, it is not correct to compare Microsoft’s cloud revenue numbers with Amazon’s pure AWS numbers.
According to analyst estimates, Azure pulled in around $5 billion in revenue in all of 2017. This roughly equals to less than $1.3 billion in revenue per quarter. As per the latest earnings report from Amazon, AWS pulled in $5.1 billion last quarter, which is almost 3.5x of Microsoft’s Azure revenue. So, Amazon is clearly ahead of Microsoft in the cloud market.
In order to catch up to AWS, Azure has to maintain its current growth momentum for at least 3-4 years. Another problem is that AWS is still growing and it shows no signs of slowing down. It will be interesting to see how Microsoft executes its cloud strategy to beat Amazon in the years to come.