Microsoft Azure is growing much faster than AWS. In recent years, Microsoft’s cloud service has been catching up with market leader AWS.
The rapid growth rate of Microsoft Azure struck market analysts, writes CNBC. They estimated that five years ago, Azure’s cloud size was only half that of AWS. That difference in size is said to have narrowed by a quarter, making AWS’s size only a quarter larger. Exact figures are lacking because Microsoft does not discuss Microsoft Azure separately in its quarterly figures.
Quick to bet on AI
During Microsoft’s latest revenue announcement, Satya Nadella, the company’s CEO, reportedly did provide insight into the size of the AI aspect of the cloud service. Azure AI services are said to have 53,000 users.
The company had been quick to bet on AI services, and those investments are now paying off. As recently as June 2023, for example, it announced the Azure OpenAI Service that allowed companies to work on tailoring ChatGPT to their own business. Copilot, Microsoft’s AI assistant, was later introduced to Azure to help optimize cloud infrastructure.
AWS also bet on AI in 2023 but did so primarily by giving developers the tools to get started with generative AI models themselves. To this end, Amazon Bedrock was launched. Among others, models from AI21 Labs, Anthropic, Stability AI and the Amazon models are available. OpenAI’s GPT models are not in AWS’s services due to the strong partnership between Microsoft and OpenAI.
AWS thinks growth will come
Commenting to CNBC, an AWS spokesperson revealed that it expects growth from AI for the cloud service still needs to come. “Generative AI will ultimately generate tens of billions of dollars in revenue for Amazon over the next few years,” the spokesperson said.
That said, generative AI could still generate more revenue for Azure than for AWS in the coming years. For now, we only know that the growth for Azure has already started. In its latest quarterly figures, Microsoft announced that six percent of Azure’s revenue growth over the past period was due to AI, while this was three percent in the previous quarter. Overall, revenue from Azure and other Microsoft cloud products grew 30 percent last quarter, exceeding expectations of 28 percent revenue growth.
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