Amazon’s Worst Nightmare Comes True: Microsoft Azure #1 among CIOs

Among 100 CIOs at large global companies, Microsoft Azure has become significantly more popular than Amazon’s AWS as the public-cloud infrastructure of choice, according to a Goldman Sachs survey.

While Goldman Sachs emphasized that the survey measures volumes of workloads rather than revenue, the news that 56 of the 100 CIOs surveyed are using Azure versus 48 using AWS is a devastating blow to Amazon’s reputation as the supposedly “unquestioned” leader in the enterprise-cloud market.

The survey results further undercut the dubious proclamations of many analysts and media who have consistently and wrongfully described Amazon and its AWS unit as the #1 provider of cloud services.

Here at Cloud Wars, we’ve been vigorously making the case for the past two years that Microsoft is the unqualified #1 vendor in the Cloud Wars Top 10.

Why Microsoft is #1 in Cloud

• While AWS is the category creator for public-cloud infrastructure, today’s enterprise cloud includes much more than just IaaS—it also includes PaaS and SaaS. The ongoing sloppy errors made by some analysts and many in the media who equate IaaS with the entirety of the enterprise cloud have significantly distorted what’s really happening in the marketplace.
• Microsoft’s enterprise-cloud revenue is much larger than AWS’s revenue. For the past 4 quarters in which both companies have released specific figures for their enterprise-cloud revenue, Microsoft’s commercial-cloud revenue totals $41.2 billion, and AWS’s totals $31.5 billion. So for those 12 months ended Oct. 31, 2019, Microsoft’s enterprise-cloud revenue is 30.8% larger than that of AWS. That’s a profound and massive lead for Microsoft, and it even caused its CEO to say so 6 months ago: Satya Nadella Admits: Microsoft Cloud Business Is Bigger than Amazon’s.
• Driven by Nadella, Microsoft has forged powerful cloud partnerships with many of the top vendors in the world to simplify customers’ journeys to the cloud and boost the value of their cloud investments: #1 Microsoft Puts Amazon and Google on Notice: We’re Just Getting Started.
• Microsoft’s go-to-market strategy and innovations have all been designed to help business customers become digital disruptors: How Microsoft’s Revolutionary Partner Program Is Driving Hypergrowth in the Cloud.

In the cnbc.com news story disclosing the results of the Goldman Sachs survey, reporter Jordan Novet offered this additional perspective: “Additionally, more respondents expect their companies to be using Azure than any other cloud in three years, the analysts wrote. They said 66 chief information officers responded that they will use Azure for cloud infrastructure then, while 64 said they would use AWS at that time.”

The cnbc.com story also noted that Goldman Sachs estimates that “about 23% of IT workloads are now on public clouds, up from 19% in June, and they expect the percentage to reach 43% in three years.”

Final Thoughts: Microsoft vs. Amazon

So I guess the good news for Amazon is that the tendency among big-company CIOs to prefer Azure to AWS does not correlate directly to revenue. Okay, I accept that.

But riddle me this: if you were Jeff Bezos or Andy Jassy and saw the results from the Goldman Sachs survey saying that 56 global CIOs said they’re going with Azure versus 48 going with AWS, would you feel just fine and dandy because those results don’t correlate directly to revenue?

Of course not—quite the opposite.

Microsoft likes to talk about how the cloud is still in its early days, and that business customers are just beginning to comprehend what’s possible with the cloud. And because Microsoft plays at all layers of the cloud, and because it has such a long and rich history understanding the wants and needs of its customers not only in the cloud but also on-premises and in hybrid, I believe it will be Microsoft—not Amazon—that continues to be the #1 player in the cloud for the foreseeable future.

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