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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.

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