Amazon Web Services (AWS) and Microsoft demonstrated exactly why they are the big dogs of the cloud industry when they released their revenue earnings last week.
Speculation was rife in the days before Microsoft’s announcement, with Wall Street analysts predicting a revenue report of $23.56 billion, up from last year’s $22.33 billion. However, pundits were left impressed when the final figure of $24.5 billion was released, a $0.12 increase in earnings per share from 2016.
As a substantial contributor to this growth, much of the conversation over the past week has revolved around Microsoft’s cloud efforts. It has been a good year for the Microsoft cloud arm, boasting annual revenues of $6.9 billion for its cloud services, server products and intelligent cloud business units, with Azure revenue up by 90% this quarter alone. Microsoft also exceeded its $20 billion commercial cloud run rate early, hitting $20.4 billion several months ahead of the predicted 2018 target.
And Microsoft isn’t alone. With 30% of the cloud market owned by AWS, there was no doubt that the cloud-computing giant’s revenue report would be impressive. However, AWS has also beaten Wall Street expectations with a 42 percent growth in its third quarter, $80 million more than estimated.
Though last month’s revenue announcements have reinforced AWS and Microsoft’s reputation as the indisputable cloud industry heavyweights, this isn’t to say that the state of the cloud landscape will remain this way for the unforeseeable future. With Google Cloud beginning to bridge the gap, and the cloud industry set to grow at a compound annual rate of 19% for the next three years, the industry is on the cusp of what looks to be a very interesting shake up.