Microsoft Is Profitable The ‘Cloud War’ Versus Amazon: Report – Forbes

Microsoft Holds Its Annual Shareholders Meeting

Microsoft CEO Satya Nadella.

Stephen Brashear/Getty Images

Topline: Microsoft is now the most popular cloud services supplier and is steadily gaining market share against major competitors like Amazon, according to a new survey from Goldman Sachs about the current state of a trend that is reshaping the technology industry. 

  • Goldman Sachs’ latest biannual IT Spending Survey of chief information officers at large companies, first reported on by CNBC, showed that while Amazon still leads cloud services in terms of overall revenue and spending, Microsoft is the most popular supplier—and is steadily gaining market share.
  • The survey asked technology executives about their vendor choices for public cloud deployments, specifically in two areas: IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service). By both metrics, Microsoft “demonstrated continued momentum,” beating out Amazon.
  • A larger number of respondents said they currently use Microsoft’s Azure software over that of Amazon Web Services (AWS)—and that lead has been increasing since Goldman’s December 2017 survey.
  • The report also indicates that in three years, more executives expect their companies to be using Azure than any other cloud service—even AWS.
  • While Google and its cloud initiative (GCP) remain a solid third place contender in the cloud wars, Goldman’s analysts found that it saw a slight decline in traction, as fewer respondents indicated that they use the service or will do so in three years.
  • Despite this setback for Google, the analysts point to “more upside” for its cloud business than originally forecast, as Alphabet CEO Sundar Pichai and Cloud CEO Thomas Kurian’s efforts to catch up to Amazon and Microsoft start to bear fruit.

Crucial statistics: The cloud computing wars are just getting started, with plenty of potential market share to still go around: Around 23% of IT workloads are now on public clouds, and that number will reach 43% in three years, according to the Goldman analysts. The booming cloud services market on the whole is likely to balloon to a valuation of up to $1 trillion.

AWS reported $9 billion in revenue last quarter. Microsoft didn’t report specific quarterly revenue for Azure, but one analyst estimated that it was about $4.33 billion, according to CNBC.

Key background: With cloud software proving to be a booming new trend in the tech space, that will lead to even more competition between big players, such as for the $10 billion Pentagon JEDI contract earlier this year, where Microsoft won out on the deal over Amazon. With Azure’s popularity and growing momentum in the cloud services space, Wedbush analysts Daniel Ives and Strecker Backe predict that Microsoft and its CEO Satya Nadella will “win the next stage of the cloud war” against Bezos and Amazon in 2020.

What to watch for: Don’t write Google off as a competitor yet, the Wedbush analysts say. Google Cloud Platform will potentially make a “major strategic acquisition” of another public cloud vendor in its bid to catch Microsoft and Amazon.

Tangent: As Microsoft’s cloud shift starts to pay off further, workplace messaging app Slack will find it increasingly difficult to compete with Microsoft’s Teams initiative and could lose market share, according to Ives and Backe’s forecast.

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Microsoft Holds Its Annual Shareholders Meeting

Microsoft CEO Satya Nadella.

Stephen Brashear/Getty Visuals

Topline: Microsoft is now the most well known cloud expert services provider and is steadily attaining sector share against key rivals like Amazon, according to a new study from Goldman Sachs about the current state of a craze that is reshaping the technologies business. 

  • Goldman Sachs’ latest biannual IT Paying out Study of chief data officers at big companies, to start with reported on by CNBC, showed that when Amazon continue to prospects cloud solutions in terms of total revenue and paying, Microsoft is the most common supplier—and is steadily gaining market place share.
  • The survey asked engineering executives about their seller alternatives for general public cloud deployments, particularly in two places: IaaS (infrastructure-as-a-assistance) and PaaS (system-as-a-services). By both metrics, Microsoft “demonstrated ongoing momentum,” beating out Amazon.
  • A bigger variety of respondents stated they now use Microsoft’s Azure software above that of Amazon Website Companies (AWS)—and that direct has been expanding given that Goldman’s December 2017 survey.
  • The report also implies that in three a long time, a lot more executives be expecting their providers to be making use of Azure than any other cloud service—even AWS.
  • When Google and its cloud initiative (GCP) continue to be a stable third spot contender in the cloud wars, Goldman’s analysts observed that it saw a slight drop in traction, as much less respondents indicated that they use the assistance or will do so in 3 yrs.
  • Inspite of this setback for Google, the analysts place to “more upside” for its cloud organization than initially forecast, as Alphabet CEO Sundar Pichai and Cloud CEO Thomas Kurian’s initiatives to catch up to Amazon and Microsoft commence to bear fruit.

Important studies: The cloud computing wars are just acquiring begun, with plenty of opportunity current market share to even now go around: All over 23% of IT workloads are now on community clouds, and that quantity will attain 43% in 3 several years, according to the Goldman analysts. The booming cloud companies industry on the entire is most likely to balloon to a valuation of up to $one trillion.

AWS described $9 billion in income very last quarter. Microsoft did not report distinct quarterly income for Azure, but just one analyst believed that it was about $four.33 billion, according to CNBC.

Important background: With cloud application proving to be a booming new development in the tech space, that will direct to even much more competition among significant gamers, this kind of as for the $10 billion Pentagon JEDI deal earlier this year, exactly where Microsoft won out on the offer about Amazon. With Azure’s attractiveness and escalating momentum in the cloud expert services area, Wedbush analysts Daniel Ives and Strecker Backe forecast that Microsoft and its CEO Satya Nadella will “acquire the next stage of the cloud war” versus Bezos and Amazon in 2020.

What to observe for: Never create Google off as a competitor nevertheless, the Wedbush analysts say. Google Cloud System will perhaps make a “big strategic acquisition” of an additional public cloud seller in its bid to capture Microsoft and Amazon.

Tangent: As Microsoft’s cloud shift begins to shell out off further, office messaging application Slack will obtain it increasingly complicated to contend with Microsoft’s Teams initiative and could drop market share, in accordance to Ives and Backe’s forecast.

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