Q1 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. It has been completely rewritten and updated for 2019.
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) sales of $7.7 billion, compared to $5.44 billion at this time last year. AWS revenue grew 41% in the first quarter – at this time last year, that number was 49%.
Across the business, Amazon’s growth rates are slowing down – which perhaps is all that can be expected at their mammoth size. However, their profit margins are increasing, giving investors a boon of $7.09 earnings per share compared to the projected $4.72.
AWS has been a huge contributor to this growth. This quarter, AWS revenue makes up 13% of total Amazon sales, up from 10% in the fourth quarter. AWS only continues to grow, and bolster the retail giant time after time.
In media commentary, AWS’s numbers seem to speak for themselves:
- CNBC Markets: Amazon Web Services revenue grew 41% in the first quarter
- Geekwire: AWS revenue approaches $8 billion in Q1, up 41 percent compared to last year
Azure
While Amazon breaks out revenue from AWS separately, Microsoft has a more nebulous “commercial cloud business” – which includes not only Azure, but Office 365, Dynamics 365, and other segments of the Productivity and Business Processes Division. This fact frustrates many pundits as it simply can’t be compared directly to AWS, and inevitably raises eyebrows about how Azure is really doing. Microsoft reported that the commercial cloud business grew 41% in the first three months of 2019, to $9.6 billion.
What Microsoft reported for Azure specifically is the growth rate: 73%. However, Microsoft did not specify what that growth actually represents. This time last year, the Azure growth rate was reported at 93%. Supposedly, analysts say that Azure is growing at a faster rate than AWS was at a similar size, but without specific numbers, it’s hard to say what this actually means.
Here are a few headlines on Microsoft’s reporting that caught our attention:
- GeekWire: Azure revenue remains a mystery, but cloud services continue to drive Microsoft forward
- The Motley Fool: Is Microsoft Becoming a Better Cloud Stock Than Amazon?
- TechRepublic: Microsoft keeps hiding Azure revenue numbers, but why?
Google Cloud
Like Microsoft, Google avoided reporting specific revenue numbers for its cloud business yet again. Parent company Alphabet reported $36.34 billion in revenue for the quarter, up 17% from $31.15 billion for the same quarter last year. Google Cloud Platform revenue is included in Google’s “other” revenue category, alongside G Suite, Google Play, and hardware such as Nest. That category reported revenue of $5.45 billion for the quarter, up 25% from the same quarter last year when it was $4.25 billion.
According to Google and Alphabet CFO Ruth Porat, “Google Cloud Platform remains one of the fastest growing businesses in Alphabet with strong customer momentum reflected in particular in demand for our compute and data analytics products”. But without specifics, it’s hard to say what this means.
Further reading on Google’s quarterly reporting:
- Channel e2e: Google Cloud Revenues: CEO Sundar Pichai Dodges Question
- CRN: Alphabet Stock Drops on Disappointing Google Revenue
- ZDNet: Google’s Q1 means cloud revenue run rate still AWOL
- GeekWire: Google Cloud is the single-largest driver of headcount growth at Google
2018 vs. 2019 Market Share
When we originally published this blog last year, 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.
This year they report 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 reports Azure and Google Cloud with bigger percentage increases.
AWS vs Azure vs Google Cloud Market Share – And the winner is:
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 and Google aren’t breaking down their cloud numbers just yet.
Others have made their own estimates. In November, a Goldman Sachs report stated that AWS, Azure, Google Cloud, and Alibaba Cloud made up 56% of the total cloud market, with that projected to grow to 84% this year. The report shows AWS far, far in the lead with 47% of the market projected for this year, with Azure and Google trailing at 22% and 8% market share, respectively.
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 Google positions itself for multi-cloud and Azure continues rapid growth rates. Perhaps this time next year will report revenue numbers broken out and we’ll be able to say for sure.
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).
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.