Microsoft's Cloud Server Business in 2022 Was Less Than Half of AWS, New Document Reveals (theinformation.com) 30
For years Microsoft has kept a lid on details about the true size of its Azure cloud server rental business, making it impossible for investors to know how Microsoft's cloud operations unit stacked up against industry leader Amazon Web Services. But this week, thanks to antitrust regulators, the world got a peek under the lid. The Information: Azure generated half the revenue of its primary rival, Amazon Web Services, in the 12 months ended June 2022, according to internal documents briefly posted by federal antitrust regulators on a court website this week. That means Azure's share of the market was several percentage points smaller than some analyst firms had estimated. That could change investor perceptions of Microsoft's success in cloud, suggesting it hasn't done as well as widely believed. The document posted online showed that in June of last year, Microsoft CEO Satya Nadella told the company's board of directors that the cloud server business within Azure would generate $34 billion in revenue in the 12 months ending June that year. That number is directly comparable to the $72 billion that AWS reported in the same period, unlike the cloud revenue number that Microsoft typically reports, which includes subscription software.
Anecdotally MS is losing to Amazon (Score:4, Interesting)
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MS forgot how to be nimble and competitive. Decades of relying on their Windows/Office cash cow has made them fat, lazy, and out-of-touch. Whenever they chase trends/fads, they are usually at least 2 years behind when it finally comes out, and it's clunky*.
That being said, I don't trust Amazon any more than Microsoft. They are both sleazebags in terms of manipulating customers and the market.
* MS changes their UI platforms more often than I change my underwear, yet they get worse with time. They often chase
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Re: Anecdotally MS is losing to Amazon (Score:3)
I think you understate that. Practically every company where there technical staff get a say is on, or moving to AWS. A few are on Google cloud. A few are staying on-prem for their own reasons. It takes a management mandate for anyone to use Azure. Reliability, manageability, and performance are not just better on AWS, they are worlds better.
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Revenue is not exactly market share (Score:3)
I'd say revenue is not directly correlated to market share, if the customers would not spend the same on each provider for similar things. While we do use S3 and also some other AWS resources (most notably smtp servers, as other clouds tend to not allow them), we have most of our cloud assets on GCP, as it would cost us more on AWS. E.g. take a look at a spot VM cost/performance comparison [dev.to] I did recently, Azure and GCP offer their deep discounts on a much wider range of compute instance types. There are similar differences in many resources.
What's more, when we bought a company with Windows infrastructure recently and were looking to move them from Rackspace (very expensive & bad IMHO) to a cloud provider, AWS and GCP were so much more expensive than Azure, because Microsoft can give silly discounts to themselves for SQL Server and Windows licenses. So if the same solution would cost 2x on AWS, it's not necessarily twice the market share.
I am definitely no Azure fan - I'd only ever use it for Windows infrastructure, and I avoid Windows as much as possible, but I am just saying, it's not as clear cut as the title implies.
Inverstors (Score:2)
but I am just saying, it's not as clear cut as the title implies.
The title is about the inversors' perspective.
They aren't as much interested in the peculiar experience of end users like you.
All they care boils down to "Line must go up!" and "We want bigger part of the pie!".
So for them, it is as clear cut as the title says: Microsoft has been revealed to not be number 1, and to be much smaller than number 1.
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Revenue is not exactly market share. I'd say revenue is not directly correlated to market share [...]
You seem to have a misconception about what market share represents. It is a direct measure of revenue generated in a given market and how much of that revenue is captured by each company participating in the market. So by definition, revenue is the accurate measure of market share. If two companies are in the same market, and company A sells twice the number of widgets as company B but at a quarter of the price, company B has twice the market share of company A. You seem to be implying company A actually h
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There are two kinds of market share (first google link explaining is this [nationalpu...search.com], no idea of quality). In tech, we usually refer to volume market share. E.g. when we say compare smartphone market share, we refer to shipment of actual devices - otherwise Apple would always come first, as their devices are more expensive on average. Or console market share is the number of consoles, we don't factor in their price. As a tech person, when I year cloud provider market share, I assume we are talking about what percent o
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After researching a bit after reading your response, I do concede the term market share is often used to measure volume instead of sales. I did notice that every source I could find listing a volume based market share metric took special care to stipulate they were measuring volume or shipments. This makes sense since traditionally market share is a measure of sales. But it does appear common to still use the term market share when referring to volume based metrics as long as the deviation from the norm is
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That was a thoughtful response. I do also have to concede that the "is not directly correlated to sales" comment was a bit sloppy. What I wanted to express was that if we compare sales revenue between two companies to get an idea about their sales volume, we have to account for what they are charging. But this was all because I was using the "market share" definition that matters to techies when discussing tech ;)
But, yeah, I could have put it more clearly. And I didn't even think that revenue is indeed oft
Depends on shop's existing platform (Score:2)
> because Microsoft can give silly discounts to themselves for SQL Server and Windows licenses. So if the same solution would cost 2x on AWS, it's not necessarily twice the market share.
If you are an existing MS shop, then MS usually makes financial sense because they tend to give bundled deals for MS products (it's what near-monopolies do). Amazon probably has to pay full retail price for Windows product licenses, and pass these costs onto the customer.
On the other hand, if you are a Linux/LAMP/Java sh
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At least there's SOME competition (Score:2)
Though of course Amazon should be required to separate out its Cloud service from the rest of its products. Actually it should go the whole hog and separate Prime TV from the goods delivery service.
There's definitely room for spin here (Score:3)
AWS and Azure may look like direct competitors on Wall Street, but in the IT office, the score is very much not even.
Microsoft makes a fortune off its Microsoft365 line. It runs on Azure on the back end, so Microsoft technically has millions of hosted mailboxes and AzureAD and Sharepoint/Onedrive...on a service for which Amazon simply doesn't offer a competitor.
On the flip side, AWS hosts a metric ton of websites, likely several factors more than Azure does. Oh, the pittance of websites hosted on Azure vs. Godaddy and Squarespace! How *ever* will Azure catch up? ...but nobody is making that argument. Similarly, Cloudfront is a very direct competitor to Cloudflare...but while Azure does have a CDN service, is its uptake negligible due to Amazon, or due to Cloudflare?
Microsoft still makes a measurable amount of money selling on-prem software. Sure, it's not the glory days of 2005, but the revenue stream is higher than Amazon's $0 in this space.
Let's talk about S3. Its real competitors are companies like Wasabi and Backblaze. If S3 were to be turned off tomorrow, most people would migrate to those companies instead of Azure...does that mean AWS has more market share than Azure, or that S3 is a different-market-with-overlap akin to web hosting?
Amazon has DynamoDB; Azure has SQL Server...but neither are drop-in replacements for the other and the former is a direct competitor to Oracle rather than Microsoft.
There are plenty more examples to be had, but the point is that Azure and AWS aren't as direct of competitors as Wall Street seems to want them to be. People looking to move large volumes of MS-centric workflows aren't going to be considering AWS, and folks with tiny EC2 instances for Wordpress and Instacart installs aren't getting into bed with Microsoft (they're more likely to start with DigitalOcean, if anyone besides Amazon), but saying "AWS has more market share than Azure" is only true if we define "the market" in sufficiently narrow terms to make it true...and that's disingenuous.
Re:There's definitely room for spin here (Score:4, Interesting)
Microsoft makes a fortune off its Microsoft365 line. It runs on Azure on the back end, so Microsoft technically has millions of hosted mailboxes and AzureAD and Sharepoint/Onedrive...on a service for which Amazon simply doesn't offer a competitor.
I'd say that the 'Office' using Azure on the backend doesn't make 'Office' revenue as attributed to Azure. No more than Adobe CC revenue should count as 'AWS' just because Adobe uses AWS. I presume this is narrowly trying to compare "like for like", in which case it would totally be appropriate to omit Microsoft products that self-host in Azure, as that implementation detail doesn't mean anything for Azure as a competitor in the hosting space.
On the flip side, AWS hosts a metric ton of websites, likely several factors more than Azure does. Oh, the pittance of websites hosted on Azure vs. Godaddy and Squarespace! How *ever* will Azure catch up? ...but nobody is making that argument. Similarly, Cloudfront is a very direct competitor to Cloudflare...but while Azure does have a CDN service, is its uptake negligible due to Amazon, or due to Cloudflare?
On this front, you just pretty much listed a set of products that are in fact direct competitors with each other. The fact that for one subset (CDN), there's an even bigger third competitor doesn't detract from the validity of comparing AWS to Azure.
Microsoft still makes a measurable amount of money selling on-prem software. Sure, it's not the glory days of 2005, but the revenue stream is higher than Amazon's $0 in this space.
Sure, but this topic is Azure vs. AWS, not Microsoft vs. Amazon. Amazon makes a measurable amount of money selling retail goods vs. Microsoft's $0 in the space, but that is also not relevant.
Let's talk about S3. Its real competitors are companies like Wasabi and Backblaze. If S3 were to be turned off tomorrow, most people would migrate to those companies instead of Azure...does that mean AWS has more market share than Azure, or that S3 is a different-market-with-overlap akin to web hosting?
While those may be the 'real competitors', it is still the case that Azure *tries* to participate in that space. The fact that MS' offerings are unpopular reinforces the relevance of comparing the business unit performance, rather than saying it doesn't make sense.
If the story was 'AWS lagging Azure', you may have a point about all the Microsoft software that Amazon doesn't try to compete with. However, it's the reverse, and Azure *clearly* strives to match, feature for feature, AWS. Every AWS product you cited *has* an attempted MS equivalent. Just because they might be a commercial failure, doesn't mean that MS didn't *try*.
Azure clearly has a massively healthy customer base and natural progression to essentially force on-premise Microsoft customers to migrate to Microsoft hosted infrastructure, so their business prospects are pretty solid. It would be silly to call their business "in trouble", but it is an interesting data point that AWS continues to lead despite MS best efforts otherwise. Whether that's due to quality of product, pricing of product, or first mover advantage with AWS being there before MS is a matter of debate.
Re: There's definitely room for spin here (Score:2)
CosmosDB is the Azure equivalent of DynamoDB. In theory you could migrate from one to the other without too much trouble.
Re: There's definitely room for spin here (Score:2)
DynamoDB is noSQL. I think you have your database services confused. AWS has a full range of them, not just DynamoDB.
Similar workspace? (Score:2)
Does Microsoft compete directly with Amazon in the same workspace? By that I mean, Micorsoft's Azure is not just storage. It's everything to do with O365, their various software packages, and so on. Is this the same thing Amazon does with AWS, or are they strictly storage space and web site content delivery?
I don't follow either that closely to know how similar they are. This could explain some of the differences. If you're a truck dealership you don't compete in the same space as a car dealership so dir
Synergy Research Group is wrong? (Score:2)
Synergy Research Group has claimed that AWS only has a 40% greater market share than Azure as recently as Q1 2023. It looks like they might have to revisit their methodology if these findings are showing are significantly refuting Synergy Research's results. I have no idea how they perform this research but apparently they are massively overstating Azure revenue. Synergy Research has claimed Microsoft revenue was closer to $50 billion, representing a 22-23% market share, but these filings appear to put thei
The average (Score:2)
Look around and think how stupid the average cloud customer is. Now realise half of those are even more stupid than the average cloud idiot. They're Azure customers. If your workload can survive Azure/AWS IO throttling, then you can probably run it elsewhere for so much less, but with higher reliability.
Re: The average (Score:2)
Where do you suggest running small to medium websites, databases, and storing data? There are loads of places cheaper than AWS but I've never seen anything cheaper and more reliable.
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IME a dedicated machine in hetzner gets you both reliability, performance and relatively inexpensive.
Facts correct, but dubious interpretations (Score:1)
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More than Half of AWS's business in 2022 was scams (Score:1)