Microsoft’s latest $1 billion business is Windows Azure

azureMicrosoft’s Windows Azure is the latest product from the company to reach $1 billion in sales, suggesting that Microsoft is becoming a more formidable competitor to Amazon.com in the world of cloud computing, according to a Bloomberg News report this afternoon.

It becomes the seventh billion-dollar business within Microsoft’s Server & Tools Division alone, according to ZDNet.

Although some portion of the revenue has shifted from Microsoft’s traditional server business, the revenue milestone is no mean feat, given the aggressive price-cutting that Amazon brings to the industry.

The announcement follows Azure’s expansion last year into the realm of raw “infrastructure as a service,” which appeals to many startups. Microsoft had focused largely on a higher-level “platform as a service,” before expanding into infrastructure as a service last year. Satya Nadella, president of the Server & Tools Divison, addressed that topic in a discussion with reporters in March.

For context, Bloomberg cites a Sanford C. Bernstein & Co analyst who says Amazon Web Services’ annual revenues could reach $20 billion by 2020, up from from $1.8 billion last year.

  • http://www.christopherbudd.com Christopher Budd

    Give it credit: Server and Tools is really the little engine that could. It’s the part of the company you hear the least about but is consistently doing well financially and has a lot of credibility in its space.

  • http://blog.findwell.com Kevin Lisota

    Their new VM feature, while late compared to AWS, is quite nice. Also a fan of Azure Websites which I’m not sure AWS has a direct answer for. (other than a kludge in S3 or a full-blown EC2 instance)

  • http://www.appatic.com Avatar X

    The rumor is 1.1 billion something. It does includes other stuff that gets bundled with Azure but projections put pure Windows Azure passing the 1B mark in this quarter anyway.

  • http://www.facebook.com/people/Steve-Murch/705204492 Steve Murch

    Developers, developers, developers, developers.

  • http://www.facebook.com/scottmoore.seattle Scott Moore

    This seems an area where Microsoft can innovate and offer good value. Server and tools has been growing and getting better for years. MS actually stands a chance of doing well and making great products here.