Microsoft’s revenue from its Azure cloud platform more than doubled in 2016, reaching $2.7 billion, according to an estimate from JP Morgan analysts, as quoted in the Wall Street Journal this week.
The number, which has not been confirmed by the company, gives a sense for the growth of Microsoft’s cloud platform and also the gap between Microsoft and the public cloud leader, Amazon Web Services, which reported more than $12 billion in revenue for the same time period.
A separate estimate quoted in the Wall Street Journal, from analyst Aaron Kessler of Raymond James, pegged Google Cloud Platform’s revenue at more than $1 billion for the year. The search giant’s cloud initiatives are led by Google senior vice president Diane Greene, co-founder and former CEO of VMware, who joined Google as an executive in late 2015.
We’ve contacted Microsoft, Raymond James and JP Morgan for more details on the numbers.
Neither Google nor Microsoft publicly reports revenue specific to its cloud platform. Microsoft publicly reported an annualized “commercial cloud run rate” of more than $14 billion as of the end of 2016. That number includes Azure’s results, but also other commercial cloud products, including Office 365 cloud applications, which means it can’t be compared directly to the Amazon Web Services numbers.
Microsoft’s biggest line of business is Office, which pulled in about $23.6 billion in revenue in the fiscal year ended June 30, up slightly from the year before, according to numbers disclosed in Microsoft’s annual 10-K filing last year. Server products and tools were second with $19.2 billion in revenue for the year, while Windows was third in annual revenue, at $14.7 billion.
A recent report from Synergy Research Group showed Amazon maintaining more than 40 percent market share in the cloud amid a big jump in the overall size of the market. The next three competitors, Microsoft, Google and IBM, were able to boost their collective market share by 5 percentage points in the fourth quarter, reaching a combined 23 percent of the global market for Infrastructure as a Service and Platform as a Service, according to Synergy. The research firm cited “particularly strong growth at Microsoft and Google.”