When looking at the cloud, the market is one of the most interesting. The leading companies are clearly defined and for the most part locked in their position. All the while, the major players are mostly growing. So, when analysts say Microsoft Azure will eventually pass market-leader Amazon Web Services (AWS), we must file it under “bold claim”.
These two companies dominate the cloud market. AWS hovers around 45% while Microsoft Azure is at around 20-22%. I have often written on these pages that each company is locked into that position. Microsoft is not catching AWS anytime soon. Similarly, Google Cloud (around 10%) will not be impacting Microsoft.
That makes the cloud market interesting, because all major players are enjoying huge success regardless of their market position. So, that's my argument.
One analyst takes a bolder approach and says Microsoft Azure is starting to ramp up how much market share it takes from AWS. Dan Ives, an analyst for Webush Securities says market acceleration means Microsoft is catching Amazon:
“In the September quarter we are seeing a clear acceleration of larger and more strategic enterprise cloud deals (both domestically as well as in Europe) as we believe Redmond is poised to win the lion's share of the next phase of cloud deployments vs. Amazon.”
“While AWS remains the leader in cloud, we believe MSFT is starting to clearly “close the gap” as Redmond is seeing an acceleration of spending among enterprises around public/hybrid cloud deployments.”
Of course, analysts can be wrong, but it does provide some food for thought. Microsoft has repeatedly discussed the ongoing growth of Azure. Indeed, the division (bundled into all cloud output) grew 73% year-on-year in fiscal 2019. As for Amazon, AWS growth was at 37%.
Erik Rasmussen, an analyst with Stifel, says Microsoft is growing on AWS and targeting Europe as a growth market.