Quarterly Reports Showcase Competition Between Amazon and Microsoft

Quarterly Reports Showcase Competition Between Amazon and Microsoft

Graphs of financial analysis - Isolated

With 35% of IT services today delivered totally, or partially, by cloud, it should come as no surprise that cloud computing is a huge industry. However, few people realized exactly how much this market was worth until Amazon and Microsoft released their quarterly earnings reports in late April. With both companies revealing figures in the billions solely for their cloud computing services, the only question that remains is who will take the lead as this field continues to grow.

On April 23, Amazon released the numbers for its cloud computing service as part of its quarterly report for the first time in the company’s history. Called Amazon Web Services, the division reportedly collected $1.56 billion in revenue in the first few months of 2015, collecting a profit of $256 million with a 17% margin. The company also boasted that its revenues had grown 49% between the first quarter of 2015 and the first quarter of the previous year. And that’s just for the first quarter: in the past year, Amazon Web Services has reportedly collected $5.16 billion in revenue, in comparison to the $4.64 billion it had generated in 2014.

The figures released in Amazon’s quarterly report fit with several other impressive statistics: for example, Amazon Web Services currently has over a million business customers, an increasing number that is driving an annual revenue growth of more than 40%. This is primarily due to the division’s Simple Storage Service, which is increasing 132% year over year, and Elastic Computer Cloud, which is growing 99%.

However, Microsoft’s data proves that Amazon isn’t without competition: while the company combines all of its cloud-related services into a single “cloud revenue” figure that includes the cloud computing platform Azure, Office 365, SaaS, and Dynamics CRM, this revenue is estimated to bring in $6.3 billion in 2015, a 106% increase for the year. Moreover, Microsoft’s earnings call slide deck indicated that customer usage of Azure has more than doubled, a vague description that nevertheless can’t be disregarded.

Amazon and Microsoft aren’t the only major parties in the industry, of course. Unfortunately, competitors Google and IBM do not release financial data about their cloud computing services. Google places this division into its “Other” category, which topped $1.75 billion for the quarter, a 23% increase year-over-year. Meanwhile, IBM announced that their service ended the quarter with a revenue of $3.8 billion, an increase of a billion and a half in the last year. While these figures are indeterminate, with little indication of how much revenue and growth came specifically from cloud computing services, one thing is clear: the competition between these major players won’t be easily resolved, and businesses will likely need to turn to cloud consultants and other services to help them choose and implement the right service.

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