Azure vs. AWS 2017: what’s the deal? There’s been a lot of speculation lately that Microsoft Azure may be outpacing Amazon Web Services (AWS). We think that’s interesting and therefore worth taking a look at these claims. After all, AWS has been dominating the public cloud market for so long, maybe the media is just bored of that story, and ready for an underdog to jump ahead. So let’s take a look.
Is Azure catching up to AWS?
You may have seen some of the recent reports on both Microsoft and Amazon’s recent quarterly earnings. There have certainly been some provocative headlines:
- Microsoft’s cloud business is growing almost twice as fast as Amazon’s, with Google far behind
- Analyst ‘Absolutely Certain’ Azure Will Beat Out AWS Within 5 Years
- Microsoft Azure is Catching Up with AWS
- Azure surpasses AWS as the public cloud of choice
- AWS vs Azure vs Google Cloud Market Share 2017
With Amazon and Microsoft reporting their quarterly earnings at the same time, this is a good time to analyze the numbers and see where they stand in relation to one another. Upon closer inspection, here’s what the recent quarterly earnings reports showed:
- AWS revenue grew 43% in the quarter, with quarterly earnings of $3.66 billion, annualized to $14.6 billion. Sales and earnings exceeded expectations given by analyst estimates. In the immediate wake of Amazon’s report, the stock went up.
- Microsoft reported that its Intelligent Cloud division grew 11% to $6.8 billion, and that the Commercial Cloud division has a annualized run rate of $15.2 billion. These reported earnings only met analyst expectations, and therefore the stock fell by nearly 2 percent within hours.
- We think it’s important to note when it comes to Microsoft’s reported earnings the Commercial Cloud business includes Office 365, not just Azure. We have never fully understood why the Office 365 business has been bundled in with Commercial Cloud, given that it’s a very different business than the IAAS services of Amazon and Google to which it is often compared.
- Microsoft stated that Azure’s growth rate was 93%, without providing an actual revenue number. Once again, we find this lack of lack of earnings clarity somewhat problematic.
So is Azure bigger than AWS?
Well, currently no. There is little evidence of Azure surpassing AWS, aside from a small research study which pales in comparison to a clear majority of data stating otherwise.
But is Azure growing quickly?
Yes. In this regard, it’s important to consider what factors are at play in Azure’s growth, and whether they hold any weight as far as surpassing Azure outpacing AWS in the future.
Where is Azure actually gaining ground?
Now let’s take a look at what is driving Azure’s growth, and where Azure is gaining ground.
First of all, as companies grow beyond dipping their toes in the water of public cloud, they become more interested in secondary options for diversity and different business cases. Just from our own conversations, we’re finding that more and more AWS users are using Azure as a secondary option. While users might be interested to see what Azure can offer them in comparison, this doesn’t necessarily indicate that it will ultimately surpass AWS.
Take, for example, the results of a research survey released by data analytics provider Sumo Logic and conducted by UBM Research. According to the survey of 230 IT professionals from 500+ employees, Azure actually beat AWS as the preferred primary cloud provider, taking the lead by a 10 percent margin, with 66 percent of participants preferring Azure as opposed to the 55 percent who relied in AWS.
This research is significant because it’s the first time that survey data on customer preferences has reported Azure taking a lead over AWS. However, the data also revealed that a significant number of enterprises are using more than one cloud provider. While Azure and AWS both take the lead, there is certainly an overlap in participants who use both, in addition to other up-and-coming providers.
Second, enterprises have been committed to a variety of Microsoft products for years. According to UBM Research survey data, over 50 percent of participants who preferred Azure as their primary cloud provider were coming from large enterprises with 10,000+ employees. This makes sense considering that Microsoft has a foothold in terms of relationships and enterprise agreements with these larger organizations and are able to cross-sell Azure.
Third, Azure has a strong base in Europe, where more users report using Azure rather than AWS as their primary provider. In a 451 Research Survey with 700 participants considered to be “IT decision makers,” AWS topped the list among all participants as the preferred provider among 39 percent of participants. While Azure saw an increase in users, it still landed in second place overall at 35 percent. However, among the European participants only, Azure took the top spot, with 43.7 percent naming Azure as their provider, and 32 percent sticking with AWS.
Why does the Azure vs. AWS debate matter?
Why does the Azure vs. AWS 2017 debate matter to, when choosing a new or secondary cloud provider? Well… in terms of market performance, it probably doesn’t. As always, the specific needs of your business are going to be what’s important.
One thing is for certain: the public cloud is growing and it’s here to stay. Let’s not forget that both Google and IBM both have growing public cloud offerings too (and Google is looking to expand their enterprise market this year.) All of this competition drives innovation, and therefore IaaS and PaaS offerings – and perhaps, better pricing.
For the customer, the basic questions remain the same when evaluating public cloud providers:
- How understandable are the public cloud offerings to new customers?
- How much do the products cost?
- Are there adequate customer support and growth options?
- Are there useful surrounding management tools?
- Will our DevOps processes translate to these offerings?
- Can the PaaS offerings speed time-to-value and simplify things sufficiently, to drive stickiness?
- What security measures does the cloud provider have in place?
Based upon the evidence we think it’s pretty clear that AWS is still the leader among public cloud providers.
We’ll continue to track the AWS vs. Azure comparison, and as the companies’ offerings and pricing options grow and change – we’ll be interested to see how this evaluation changes in 2018.