Today, we’ll take a look at the latest AWS vs Azure vs Google Cloud market share comparison, including the Q4 2020 earnings the ‘big three’ cloud providers have reported. Let’s take a look at all three providers side-by-side to see where they stand.
Note: several previous versions of this article have been published. It has been updated for February 2021.
AWS vs. Azure vs. Google Cloud Earnings
To level-set this comparison, first know that – unsurprisingly – the cloud market as a whole is bigger than ever. Gartner has predicted worldwide public cloud spend to grow 18% in 2021, with 70% of organizations using cloud to increase cloud spending in the wake of COVID-19.
So within that market, let’s take a look at the AWS vs Azure vs Google Cloud market share breakdown and what each cloud provider’s reports shared.
First, the big news, of course: Jeff Bezos is trading his CEO role for Executive Chair of the Amazon Board, while current CEO of AWS Andy Jassy will step up to the Amazon CEO role. No AWS CEO has yet been announced, but many bets are on Matt Garman, currently the Vice President of AWS Sales and Marketing, or else Peter DeSantis, AWS’s Vice President of Global Infrastructure.
Next, the bigger news: Amazon revenue.
Amazon reported Amazon Web Services (AWS) revenue of $12.7 billion for Q4 2020, compared to $9.95 billion for Q4 2019. AWS revenue grew 28% in the quarter.
Amazon as a whole had their first quarter over the $100 billion mark, at $125.56 billion. That’s an increase of 44% year-over-year, and beating predictions of $119.7 billion. Earnings per share were $14.09, compared to a $7.23 forecast.
Amazon as a whole benefitted from an astronomical online holiday shopping season due to COVID-19, and also from Prime Day being held in the fourth quarter. And AWS? It made up 10% of Amazon’s sales for the quarter – and 52% of its operating income.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 and/or highlighting the fact that it’s flattening out, quoting that 28% 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 (see Geekwire graph), and dominate the market (as we’ll see below). AWS added more revenue quarter-over-quarter and year-over-year than any quarter in its history. Dave Fildes, Director of Investor Relations, mentioned on the call that “If you account for this COVID anomaly this year of [AWS re:Invent] being virtual and free, AWS year-over-year revenue growth, if you look at it, actually accelerated adjusting for that from the third quarter to the fourth quarter,” an interesting tidbit both from the perspective of gaining a glimpse into what re:Invent actually does for the company, and that AWS revenue is accelerating.
While Amazon specifies AWS revenue, Microsoft only reports on Azure’s growth rate. That number is 50% revenue growth over the previous quarter. This time last year, growth was reported at 62%. 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 23% to $14.6 billion. The operating group also includes server products and cloud services (26% 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.
Nonetheless, Microsoft’s cloud business is clearly generating success for the company. Intelligent Cloud delivered the highest operating income of all segments this quarter at $6.4 billion, which is 36% of total consolidated operating income.
In more exciting news for public cloud followers, Alphabet has broken out Google Cloud revenue for the first time. Thus we learned that while Google Cloud revenue has increased over the last three years, so too have their operating losses. CFO Ruth Porat notes that these operating losses “reflect that we have meaningfully built out our organization, ahead of revenue.”
This quarter, Google Cloud reported revenue of $3.83 billion, an increase of 47% year-over-year. Operating losses were $1.24 billion compared to losses of $1.19 billion one year previously. For the full fiscal year 2020, Google Cloud’s revenue was $13 billion, with $5.6 billion operating losses.
Note that the Google Cloud unit includes not only Google Cloud Platform but also Google Workspace (formerly G Suite).
One highlight was that deals over $250 million tripled during 2020, and several billion-dollar deals were closed during the year.
We’ll add Alibaba Cloud to this list for the first time as the cloud computing division is profitable as of this quarter. The cloud computing arm of the Chinese retail giant earned $2.47 billion this quarter, an increase of 50% year-over-year.
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 2021, Canalys reports that the worldwide cloud market grew 32% this quarter to $39.9 billion. For the full year of 2020, cloud infrastructure spending grew 33% to $142 billion. AWS has 31% of the market, followed by Azure at 20%, Google at 7%, Alibaba Cloud close behind.
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. It seems clear that in the case of AWS vs Azure vs Google Cloud market share – AWS still has a substantial lead, and their market share remains steady. With that said, all players are pushing growth and innovation and driving public cloud adoption across the board.