Although comparing Azure vs AWS revenue shouldn't ever be done to make a decision on cloud technology adoption, it can be useful to look at Azure vs AWS growth patterns to understand where the cloud computing industry is going and to see if Azure is legitimately catching up. A topic that seems to be generating a lot of buzz and intense discussion within the cloud sector.
In this post, we'll look at the current market situation, compare AWS to Azure, and discuss important factors to consider when making cloud choices.
AWS Market Share
Amazon reported $13.5 billion in sales for the first quarter of 2021, compared to $10.2 billion in the first quarter of 2020. AWS' revenue increased by 32% year on year.
Although revenue has increased steadily, AWS' growth rate is showing signs of slowing down. We’ll go through why this may be later.
Microsoft Azure Market Share
Amazon discloses its AWS revenue in dollars, whereas Microsoft only reports Azure revenue growth as a proportion of total sales. Furthermore, Microsoft mixes income from Azure Cloud in with revenues from several other services under the umbrella of "Intelligent Cloud" (which includes Enterprise Services, SQL Server, Windows Server and others.). The extra income from these other services makes identifying Azure-specific revenue challenging. As a consequence, comparing market share based purely on revenue is almost impossible.
But we can still look at Microsoft Azure growth rates through time.
According to Microsoft's FY21 Q3 Earnings Release (results from March 2021, compared to the same time previous fiscal year), sales in the Intelligent Cloud category rose by 23% to $15.1 billion, which was led by 50% Azure revenue growth.
The cloud industry continues to be frustrated by the ambiguity in the real dollar amount produced by Azure, making it impossible to evaluate how Azure is actually doing.
Nevertheless, the effectiveness of Microsoft's cloud computing services is clear, with the Intelligent Cloud division bringing in the most revenue among all sectors this quarter.
Also, we can discern from this figure that, like AWS, Azure maintains substantial total revenue increase year on year, albeit at a slower pace. The latest quarter was similar to the preceding (50 per cent to 50 per cent), although there were both modest improvements from yearly growth from the previous quarter (from 48 per cent to 50 per cent). It would be fascinating to see whether this is a pattern that will persist for both providers.
AWS versus Azure - Comparison
Because of the variations in how AWS and Microsoft disclose profits, like-for-like comparison of AWS and Azure market share is difficult. However, we may draw a few conclusions based on information that we do have:
Both AWS and Azure are seeing year-on-year revenue increases. Including a demonstration of an increase in revenue in a single period as compared to the same quarter the prior year.
Though, excluding the past quarter, both providers are seeing declining revenue growth rates. Despite the fact that AWS and Azure have experienced an increase in revenue compared to the same quarter the prior year, the gap is becoming smaller, on average, every quarter. When compared directly against AWS, Azure has had better revenue growth rates in recent years. (Excluding the most recent quarter, when AWS' revenue growth rate rose from 28% - 32% while Azure's stayed constant at 50%).
Despite the fact that Azure's growth rates have been greater in the past four years, Azure's revenue growth rate is declining quickly. AWS's growth rate fell by 48 per cent over that time period, while Azure's fell by 58 per cent during the same period.
AWS's growth rate fell by 48 per cent over that time period, while Azure's fell by 58 per cent during the same period.
Why is Amazon Web Services (AWS) still the leader?
According to a new study from Synergy Research Group, "While Amazon and Microsoft continue to account for over half of the global market, Microsoft has once again gained ground on its bigger competitor and has passed the milestone of attaining a 20% global market share."
Over the past four years, Microsoft, Google, and Alibaba have gradually increased their market share, albeit not to the detriment of market leader Amazon. Throughout that time, Amazon's market share remained around 33%.
Over the past four years, Microsoft, Google, and Alibaba have all gradually increased their market share, albeit not at the cost of market leader Amazon.
At the end of the day, it's obvious that AWS is the dominant player. While it might not have the same market share as other providers, this is mainly due to the entry of new competitors, such as Alibaba, Google Cloud Platform, Oracle Cloud Infrastructure, and others, who are levelling the competitive landscape.
For example, Google Cloud has continued to expand this year, with a 56 per cent increase in the previous quarter.
AWS's #1 position in the IaaS market is largely due to the fact that it was the first cloud provider to reach the market in 2006. Microsoft, on the other hand, has a long history of delivering on-premises services to big businesses and has been using that presence in recent years to convert on-premises Microsoft clients to Azure cloud customers.
Is Amazon Web Services (AWS) a better option than Microsoft Azure?
So, given all we've discussed so far, is one cloud provider superior to the other? Market share should not be the deciding criterion when selecting a cloud provider for your company. There are many variables to consider, and the decision between the two—or whether to employ a mix of cloud service providers—will ultimately be based on each organization's specific requirements and how the findings of an Azure vs AWS comparison match with those needs. If you're contemplating a multi-cloud strategy, read our essay about the benefits and drawbacks of multi-cloud here.
To get the most out of the cost, performance, operational, and security advantages accessible to you, we suggest comparing the various service packages from each provider. Better yet, leave that to us and we’ll consult you on what we think best suits your requirements, We’ll use our expertise to meet your specific performance and budgetary needs.