Microsoft Becomes The 2nd Largest Cloud Services Provider, IaaS Business Grew 154% YoY

Microsoft Cloud IAAS Share


According to the recent data from Synergy Research Group, Microsoft’s cloud infrastructure grew by over 154% YoY which is almost 2.3 times faster than Amazon Web Services which recorded 67% growth. Amazon is still the cloud infrastructure business leader with 27% market share which is more than all the next 5 five competitors combined. IBM, Salesforce and Google are trailing behind Microsoft(8%) in which IBM, Salesforce, and Google, have 6.5%, 6%, and 4.5% share of the market, respectively.

AWS has been forcing the cloud market to slash their margin every other quarter. Microsoft has been forced to reduce the price of their services in an effort to match the prices of Amazon. Given Microsoft’s strong brand among the enterprise, Microsoft is positioned better to compete against Amazon than anyone else.

Microsoft Azure made price cuts that matched AWS’ cuts in many categories, and exceeded it in several others. The software giant chopped computing prices by 27%-35% and storage by 44%-65%. Additionally, Microsoft cut the pricing for Windows instances by 27% and memory-intensive Linux instances by 35%.

Microsoft also reported that it was lowering the prices of Block Blob storage by 65% for LRS, or locally redundant storage, and 44% for GRS, or geo-redundant storage.

With the drastic price cuts, Microsoft is now in an excellent position to challenge AWS’ leadership in cloud services. Although Microsoft’s cloud is still less than one-third the size of AWS, it would take only 6-7 years to catch up, in terms of size, assuming that it grows at a rate of 80% for the next 7 years and AWS grows at only 50%. Faster growth for Microsoft’s cloud could cut that time to as little as 4-5 years.

via: Fool

Thanks to JamesSB for the heads up!

  • LexicoRed

    It is good to see the company get aggressive with the part of the business that matters and is the future.

    Now we just need Nadella to spin off the hardware distraction. Hopefully the talks with Dell and Lenovo will wrap up soon so we can unload those money losers.

    • Bugbog

      You do realise that Cloud IaaS entails hardware, right?!

      • LexicoRed

        Not retail and as we see with XBoxOne lagging sales vs PS4, money losing irrelevant Window Phone sales, empty stores, Surface write downs and discounting, not mentioning Zune and kin, our favorite Tech company fails at retail.

        But that is ok because we are great at enterprise Software and Services. Stick to our strengths and the future is bright.

        • Tips_y

          Keep on hoping because your desire to see Microsoft cut down into bits and pieces is not happening anytime soon. LOL!

    • Joe_HTH

      Get the hell out of here. I want them to keep making Windows Phone and Surface. Nobody else is supporting WP8 worth a damn. They need to make it. Nobody else comes close to making tablets the quality of the Surface. Dell and Lenovo’s tablets suck by comparison.

      • Guest

        No one else wanting to invest it because you can make a profit on it.

    • Vương Vi-Nhuyễn – 王微軟

      As much as I hate the fact that Microsoft is now an O.E.M. I’ll have to admit that the hardware division is crucial, without Nokia Oyj’s phone unit(s) Windows Phone would’ve never been able to get a hold of (a small piece of) the market.
      Microsoft should keep investing and creating a market for other O.E.M.’s to compete in.

  • redtidal

    Amazon is absolutely a monster, bigger than the next four.

    And enough with the break up talk. That stupid Wall Street Thinking only cares about this quarter, not next decade.

  • Vương Vi-Nhuyễn – 王微軟

    The investments are finally paying off, people do need to realise that Ballmer saw this coming as much as Nadella, only Gates’ lieutenants prevented him from properly investing into it, if it wasn’t for them Ballmer would’ve made Microsoft the largest cloud-company a long time ago, but it’s better to be late than th come never…