Q4 2019 earnings are in for the ‘big three’ cloud providers and you know what that means – it’s time for an AWS vs Azure vs Google Cloud market share comparison. Let’s take a look at all three providers side-by-side to see where they stand.
Note: a version of this post was originally published in April 2018 and 2019. It has been updated for 2020.
AWS vs. Azure vs. Google Cloud Earnings
To get a sense of the AWS vs Azure vs Google Cloud market share breakdown, let’s take a look at what each cloud provider’s reports shared.
AWS
Amazon reported Amazon Web Services (AWS) revenue of $9.95 billion for Q4 2019, compared to $7.4 billion for Q4 2019. AWS revenue grew 34% in the quarter, compared to a year earlier.
Across the business, Amazon’s quarterly sales increased to $87.4 billion, beating predictions of $86.02 billion.AWS has been a huge contributor to this growth. AWS revenue made up 11% of total Amazon sales for the quarter. AWS only continues to grow, and bolster the retail giant time after time.
One thing to keep in mind: you’ll see a couple of headlines pointing out that revenue growth is down, quoting that 34% number and comparing it to previous quarters’ growth rates, which peaked at 81% in 2015. However, that metric is of questionable value as AWS continues to increase revenue at this enormous scale, dominating the market (as we’ll see below).
In media commentary, AWS’s numbers seem to speak for themselves:
- The Motley Fool: Amazon Earnings Trounce Expectations: 6 Metrics You Should See
- Business Insider: Amazon reported earnings way above Wall Street estimates, and the stock is surging
Azure
While Amazon specifies AWS revenue, Microsoft only reports on Azure’s growth rate. That number is 62% revenue growth over the previous quarter. This time last year, growth was reported at 76%. As mentioned above, comparing growth rates to growth rates is interesting, but not necessarily as useful a metric as actual revenue numbers – which we don’t have for Azure alone.
Here are the revenue numbers Microsoft does report. Azure is under the “Intelligent Cloud” business, which grew 27% to $11.9 billion. The operating group also includes server products and cloud services (30% growth) and Enterprise Services (6% growth).
The lack of specificity around Azure frustrates many pundits as it simply can’t be compared directly to AWS, and inevitably raises eyebrows about how Azure is really doing. Of course, it also assumes that IaaS is the only piece of “cloud” that’s important, but then, that’s how AWS has grown to dominate the market.
A victory for the cloud provider was the October winner of the $10 billion JEDI cloud computing contract (although AWS is actively protesting the contract with claims of political interference).
Here are a few headlines on Microsoft’s reporting that caught our attention:
- TechCrunch: Microsoft shares rise after it beats revenue, profit expectations, Azure posts 62% growth
- GeekWire: Microsoft revenue rises 14% to $36.9B, profits exceed estimates, cloud rises, and games fall
Google Cloud
This quarter, Google broke out revenue reporting for its cloud business for the first time. For the fourth quarter, Google Cloud generated $2.6 billion in revenue, a growth of 53% from the previous year. For 2019 as a whole, Google Cloud brought in $8.9 billion in revenue, which is less than AWS generated in the fourth quarter alone.
Google CEO Sundar Pichai stated on the earnings report conference call, “The growth rate of GCP was meaningfully higher than that of Cloud overall, and GCP’s growth rate accelerated from 2018 to 2019.”
CFO Ruth Porat also highlighted Google Cloud Anthos, as Google leans into enabling the multi-cloud reality for its customers, something AWS and Azure have avoided.
Further reading on Google’s quarterly reporting:
- CNBC: Google still isn’t telling us about a key metric for YouTube and cloud: Profits
- GeekWire: Google discloses cloud revenue for the first time – here’s how it compares to Amazon and Microsoft
Cloud Computing Market Share Breakdown – AWS vs. Azure vs. Google Cloud
When we originally published this blog in 2018, we included a market share breakdown from analyst Canalys, which reported AWS in the lead owning about a third of the market, Microsoft in second with about 15 percent, and Google sitting around 5 percent.
In 2019, they reported an overall growth in the cloud infrastructure market of 42%. By provider, AWS had the biggest sales gain with a $2.3 billion YOY increase, but Canalys reported Azure and Google Cloud with bigger percentage increases.
As of February 2020, Canalys reports AWS with 32.4% of the market, Azure at 17.6%, Google Cloud at 6%, Alibaba Cloud close behind at 5.4%, and other clouds with 38.5%.
Ultimately, it seems clear that in the case of AWS vs Azure vs Google Cloud market share – AWS still has the lead.
Bezos has said, “AWS had the unusual advantage of a seven-year head start before facing like-minded competition. As a result, the AWS services are by far the most evolved and most functionality-rich.”
Our anecdotal experience talking to cloud customers often finds that true, and it says something that Microsoft isn’t breaking down their cloud numbers just yet, while Google leans into multi-cloud.
AWS remains far in the lead for now. With that said, it will be interesting to see how the actual numbers play out, especially as Alibaba catches up.
Very insightful article. I am working on a similar product (MVP: https://clunite.com) that compares the three cloud providers, head to head. I would love to hear your thoughts on it as the product is in MVP state.
I’m sure Microsoft doesn’t want to spend much time arguing who is bigger, but Microsoft cloud IS bigger than Amazon, and comparing AWS to Azure misses the reason why. What that approach actually does is attempt to say “AWS doesn’t play in certain areas, so we’re only going to compare what AWS does and define the market as being what AWS does.” What is missed is this:
When a company decides they are moving some, or all of their infrastructure so that they no longer have to support it, they have several categories of applications they must consider. Let’s take just the file servers and email servers as an example. One choice they can make is to move this to VMs in AWS. If they choose to do this, then AWS gets credited with market growth. If, however, they decide that Office 365 provides what they need as a SaaS solution, they move there, Microsoft picks up the cloud workload, but it doesn’t show up in a comparison of AWS vs. Azure. The same thing happens with CRM software which can be moved onto AWS, or onto Office Dynamics. These are major parts of most companies’ total IT footprint, though.
When you look at it like this, you realize that Microsoft Cloud is bigger, and the gap is widening. In that case, Microsoft is, in fact, the largest cloud provider and is pulling away from the competition. It’s completely missing what is happening with the market to try to compare AWS with Azure.
This doesn’t mean there is no place for AWS, and it’s not bad-talking AWS. It’s just pointing out what is being missed in these articles.
So long as it is up front, I see no issue only comparing what AWS does as “the market”. Heck, you got to draw the line somewhere in comparison, else you could expand it to include sales of any kind where you have Amazon selling a ton of stuff to businesses or even individuals.
I personally was expecting a view of how big based on physical characteristics and not maturity or completeness. In that case I still only got a partial answer myself.
Azure is a joke. Most of their revenue comes from Office 365. We use both Azure and AWS and I can tell you that AWS is 10x better than Azure. In the past 6 months, we’ve had two outages where we couldn’t even login to Azure.
Thanks for weighing in Enzo – the cloud revenue is definitely obscured by Office 365.
What exactly makes AWS 10x better? (I feel the opposite but I’ve been using Azure since its inception and am heavily biased).
This is the most insightful comment to date on this subject, and a point missed by many.
Ultimately, business leaders make the decision on where they spend money. Given a choice between managing infrastructure themselves or getting continuous updates en masse via IaaS, PaaS, and SaaS, a CIO will often choose the latter.
Keep in mind also that, when analyzing the above decision, a reasonable CIO is also looking at other options, like OpenOffice, Google G Suite, Salesforce, ServiceNow, etc. The fact that Microsoft has retained customers (and picked up new customers) speaks volumes to their value.
Amazon is a Microsoft partner either way Microsoft win.
So, Amazon is way ahead it’s competitors. Well it deserves to be there as well. Although, it has to remove all the glitches that the customers are facing in order to retain that spot. I have been using AWS Cloud hosting through a third party platform like Cloudways to reduce the sustainability issues and the managed AWS Cloud hosting version is working fine for me.
Interesting take, Vince, we know some users definitely prefer to go through a third party platform!
Do you have any metrics on the BI revenue across AWS and Azure? If someone is trying to pick one cloud provider to launch their BI service, what metrics do the have to make the decision?
Hey Sam – we do not have any specific metrics! There is certainly a lot of activity in the space with Google’s recent acquisition of Looker and Salesforce’s acquisition of Tableau.
Well Amazon is the elephant in the room
I used them a lot(streaming games -Witcher 3 🙂
but now I am on Google cloud and they have everything I need:buckets for infinite cold storage,virtual machines for my windows servers and Centos servers…machines for Boinc -treating Aids and Cancer,discovering black holes and asteroids
and they also have kubernetes clusters,I cna play with AI intelligence-Mariana AI..
they dont have quantum computers yet
for that I use IBM