Which cloud computing company is better? Amazon vs. Microsoft

Last week, Amazon and Microsoft released their quarterly financial reports at the same time. The dense financial data was a headache to read, but the author still patiently checked the data of the two companies in the field of cloud computing.

So the question is, which cloud computing company is the best? In fact, we all know the answer, of course it is Amazon. After all, it is the originator of cloud computing and started doing it 8 years ago. Other manufacturers can only be regarded as younger brothers.

So which AWS is stronger? Amazon's latest financial report data gives us some quantifiable clues - that is revenue.

Amazon is very large, and AWS has not yet reached a point where it accounts for more than 5% of revenue and cannot be listed separately, although it is Amazon's fastest growing business.

AWS cloud computing is classified in Amazon's "Other" category. Although it is difficult to know the exact proportion of AWS in this category, I personally believe that AWS's revenue share in the "Other" category should be more than 90%. For the sake of comparison, we will assume that AWS is approximately equal to "Other".

In the third quarter of 2014, AWS's total revenue was $1.382 billion, up 37% from $1.011 billion in the same period last year. In the first nine months of 2014, AWS's total revenue was $38.56 billion, up 43% from $2.7 billion in the same period last year.

Although it is still growing rapidly, due to its increased size, AWS's year-on-year growth rate has actually shown a downward trend. Of course, a growth rate of 37% is actually acceptable, but this rate may not satisfy some investment bank analysts.

Last year, Macquarie Capital said in an investment bank report that Amazon Web Services (AWS) is expected to generate $3.8 billion in revenue in 2013. If it were a standalone company, its valuation could reach $19 billion to $30 billion.

In that report, Macquarie Capital predicted that AWS would have revenue of $3.8 billion in 2013, $6.2 billion in 2014, and $8.8 billion in 2015. In 2015, AWS would account for 7% of Amazon's revenue.

However, compared with the most recent financial data, Amazon AWS's estimated revenue this year is only US$5.5 billion, so the growth is not as fast as expected.

So, the question is, why has Amazon's growth slowed down? I think the main reason is that competitors have emerged - Google and Microsoft.

I won't say much about Google, its core business is still search and Android, cloud computing basic services are not core business, so it is not so focused. But there is a company that is focused, that is Microsoft.

Microsoft is building data centers around the world, and currently covers 19 large areas, each of which is as large as 16 football fields. Microsoft Azure is investing madly. At least in terms of data center investment, Microsoft is ahead of Amazon.

However, in terms of revenue, Microsoft is still far behind Amazon. And the gap is quite large.

Microsoft's Azure is also not listed separately and is included in the commercial cloud business. It is also counted as Microsoft's commercial cloud business, along with Office 365 Enterprise Edition and Microsoft Dynamics.

Commercial Other includes enterprise services, enterprise cloud services (Azure is included), and other enterprise services. This business segment had revenue of US$2.407 billion.

According to the financial report, I did a simple calculation and found that the revenue of enterprise cloud service business is about 1.179 billion US dollars. I don't know the proportion of Azure in it, but compared with the enterprise customer revenue of Office 365, Azure's share may be around 20%-30%. (Just a personal guess)

If calculated based on a 30% share, Azure's quarterly revenue may be around US$350 million, which is still a big difference compared to Amazon's US$1.382 billion.

However, Microsoft Azure is growing well. According to the financial report, revenue increased by 121% in the past quarter. If it can maintain this growth rate, it is possible that it will surpass AWS one day.

But then again, cloud computing is just getting started, and the trillion-dollar IT market is enough to accommodate several Amazons and Microsoft Azure.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.