In the battle of Azure vs. AWS, you could be forgiven for believing Microsoft's cloud platform is catching up on the industry leader. Recent headlines have exclaimed a 98% year-on-year increase in Azure revenues, while Amazon Web Services “only” reported a 45% increase in revenues over the previous twelve months. Yet, when we put those figures into context, is Azure really catching up?
AWS vs. Azure market share 2018
At this stage of the year, it is too early to establish the Azure vs. AWS market share in 2018. Based on Gartner's calculations at the end of 2016, Amazon, had a 44.2% share of the IaaS market worth $9.7 billion. By comparison, Gartner estimated Azure's market share was 7.1%, worth $1.5 billion. If, as reported, Azure almost doubled its revenues in 2017, that would equate to $1.5 billion; whereas a 45% increase on AWS' revenues of $9.7 billion works out at $4.36 billion. In effect, AWS' revenues increased by nearly three times as much as Azure's.
However, Gartner's data only relates to the IaaS market. If you include the much more competitive PaaS market - in which AWS´ market share is just 17% and Azure´s market share is 10% - the two company's respective cloud computing market share is much closer. Microsoft also has a significant foothold in the Enterprise SaaS market, in which it increased its revenues by 70% in 2016. Taking the three markets together (IaaS, PaaS and SaaS), an AWS vs. Azure revenue comparison looks a lot different.
What about Azure vs. AWS growth?
Azure vs. AWS growth doesn't mean a lot when AWS is so far ahead in the market. In the unlikely event that Azure revenues doubled for the next five years and AWS revenues increased by “only” 45% over the same time frame, the two companies would achieve parity in 2022. For this to happen however, (and ignoring the other players in the IaaS market), the market would have to grow tenfold.
When you take other players in the IaaS market into account, an Azure vs. AWS growth comparison becomes even more futile. In the last twelve months, Google and Alibaba also increased their revenues by more than 100%; and, with Google acquiring Apple as a client and Alibaba expanding into Europe next year, you can expect similar revenue increases over the next few years.
Why you shouldn't compare AWS and Azure
There are two reasons why you shouldn't compare AWS and Azure based on revenues and growth. The first is that Microsoft does not release individual revenue figures for Azure, but includes them in what the company refers to as its “Commercial Cloud Business”. These figures also include Office 365 revenues, so there is no accurate way to compare AWS and Azure on revenues and growth alone.
The second reason you shouldn't compare AWS and Azure is that the two companies are very different animals. Whereas AWS has grown into the largest cloud services provider by being first to market and by being the more developer-friendly of the two platforms, Azure caters better for larger organizations already committed to Microsoft products moving an existing infrastructure to the cloud.
So, is Azure better than AWS?
In certain circumstances, yes. Naturally the circumstances will depend on the size of the organization, its existing infrastructure and existing commitment to Microsoft products (which may result in a substantial discount). On pricing alone, there are areas in which AWS is better than Azure. However, when working out is Azure better than AWS, pricing is not the only consideration.
Areas such as governance, support, security and organizational changes also need to be considered. Furthermore, if your organization is planning on keeping some resources on premise, it also has to be considered which cloud service provider offers the best support for hybrid environments. Therefore, the answer to the question is Azure better than AWS can only be answered on a case-by-case basis.
Where many people believe AWS is better than Azure is in the range of services offered by Amazon. AWS services integrate seamlessly with other Amazon services, and the platform has been around a lot longer than Azure. On a global level, AWS also has many more servers; but again, this may not be an important consideration for all organizations.
The outlook for Azure vs. AWS in 2018
The outlook for Azure vs. AWS in 2018 is intriguing. Whereas growth for both platforms is widely anticipated, the rate of growth is expected to decelerate due to increasing competition from other cloud service providers. Most industry observers also believe hybrid solutions will take off in 2018 - an area of cloud computing in which Microsoft has got a head start due to the release of Azure Stack.
The anticipated growth in hybrid solutions is often attributed to concerns about security and disaster recovery - the primary reason why many organizations use multi-cloud environments. However, the increased adoption of containers - and the tools to manage them - is another reason why organizations are choosing to keep some of their infrastructure on premise and only use the cloud when necessary.
Azure versus AWS
It is difficult to make accurate predictions about the fortunes of Azure versus AWS. Microsoft's platform may possibly increase its market share over the next couple of years, but not to the extent where there will be parity between the two companies within the next five years. More than likely, Azure vs. AWS 2018 will consist of a period of consolidation as both companies attempt to see off growing competition from Google and Alibaba by focusing on the issues driving many organizations towards hybrid solutions.
Attempting to compare AWS and Azure is already difficult; and, as the two companies introduce new products, new integrations and new pricing structures, a direct comparison will become harder still. Ultimately, the choice between the two - or the choice to use both platforms - will depend on each organization's needs and how the result of an Azure versus AWS comparison meets those needs.