Still Chasing Amazon, Microsofts Cloud Revenue Growth Rate Is Truly Impressive

Amazon is still the dominant leader among cloud infrastructure service operators, but Microsoft has the highest growth rate.

That’s according to the team at Synergy Research Group, which says Microsoft grew its cloud revenue by a whopping 136 percent in the past year, raising its worldwide market share to more than 10 percent last quarter. Amazon Web Services’ cloud revenue also rose after a soft second quarter, inching its share back up to 27 percent.

Synergy notes that although Amazon’s percentage growth rate may be substantially lower than Microsoft’s, in absolute terms, AWS revenue growth over the past four quarters is greater than Microsoft’s total cloud infrastructure revenue over the same period; in other words, AWS remains in a league of its own for scale.

IBM is the third-largest cloud operator with a 7 percent share, followed by Google, Salesforce and Rackspace.

Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and private and hybrid cloud) have now passed the $4 billion milestone, with trailing 12-month revenues exceeding $14.5 billion. On a rolling annual basis the market grew by 49 percent, but it is notable that all four leading operators grew more rapidly than that, resulting in all of them gaining market share.

“Given the level of competition in the market, Microsoft’s growth rate has been truly impressive, reflecting a strong corporate focus on cloud and huge ongoing investment levels,” said John Dinsdale, chief analyst and research director at Synergy Research Group. “The other main feature of the Q3 market was the return to strong sequential revenue growth at AWS following a relatively weak second quarter. While prices continue to fall, Q3 did not see the huge pricing disconnect that caused AWS growth rate to falter in Q2.”

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