When comparing the leading cloud providers in terms of market share, Amazon Web Services (AWS) has consistently led the pack, followed by Microsoft Azure. Is that still the case today? In this article, we’ll dive into the cloud market landscape, conduct an AWS vs Azure comparison, and provide key considerations when it comes to your decisions in the cloud.
Amazon Web Services market share
AWS announced $11.6 billion USD in revenue for Q3 2020, compared to $8.9 billion USD in revenue for Q3 in 2019. Year over year, AWS’ revenue grew by 29%.
The tables below show AWS revenue growth and percentage change year over year from Q1 2016 to Q3 2020. While revenue continues to grow, AWS’ rate of growth is diminishing over time. We’ll talk more about why this might be the case later.
Microsoft Azure market share
While Amazon reports AWS revenue in dollars, Microsoft only shows Azure revenue growth by percentage. In addition, Microsoft combines their revenue from Azure Cloud with other services under the heading “Intelligent Cloud” (which includes revenues from SQL Server, Windows Server, Enterprise Services, and others.). The additional revenue from these services makes it difficult to find the revenue specific to Azure. As a result, it’s near impossible to compare like-for-like market share based on revenue with AWS and other cloud vendors.
With that in mind, we can still evaluate Microsoft Azure’s growth rates over time.
From this chart, we can see that, similar to AWS, Azure continues to experience significant growth year over year, but at a diminishing rate over time.
Comparing AWS vs Azure
Given the differences in the way AWS and Microsoft report earnings, it’s impossible to compare a like-for-like comparison of AWS vs Azure market share. However, based on the data we do have, we can make a few observations:
- AWS and Azure are both experiencing revenue growth year over year. In a given quarter, AWS and Azure have shown an increase in the amount they earn compared to the same quarter from the previous year.
- AWS and Azure are both experiencing diminishing revenue growth rates year over year. Although AWS and Azure have seen an increase in the amount they earn based on the same quarter from the previous year, the difference in that amount is getting smaller on average each quarter.
- In the past few years, Azure has had higher revenue growth rates when compared directly to AWS. Most recently in Q3 2020, Azure’s revenue growth was 48% compared to AWS’ revenue growth of 30.3%.
- Although Azure’s growth rates are higher in the last four years, Azure’s revenue growth rate is diminishing at a faster rate than AWS. AWS’s growth rate between that period decreased by 50%, while Azure’s growth rate decreased by 60% in the same time frame.
We can also look at analyses provided by credible third-party research firms. New data from Synergy Research Group shows that “Amazon and Microsoft continue to account for over half of the worldwide market, with Amazon market share remaining at its long-standing mark of around 33%, while Microsoft’s share was over 18%.” The image below represents the growth rates we discussed and also shows the overall predicted market share.
In the image below, Canalys offers a similar representation of the cloud provider market, with AWS holding 32% and Azure holding 19%.
At the end of the day, we can gather that AWS is still clearly the market leader. While they don’t double the market share of other cloud providers as they had in the past, it’s primarily because other players are entering the game and leveling the playing field, such as Google Cloud Platform, Alibaba, Oracle Cloud Infrastructure, and others.
Is AWS better than Azure?
So given everything we’ve outlined above, you may be wondering, is one cloud provider better than another? When choosing the right cloud provider for your business, market share shouldn’t be the determining factor. There are several factors to consider, and ultimately, the choice between the two—or the choice to use both platforms—will depend on each organization's unique needs and how the results of an Azure vs AWS comparison align with those needs. If you’re considering a multicloud approach, you should consider the advantages and disadvantages of multicloud in our article here.
Our recommendation is to compare the differentiated service offering from each cloud provider in order to make the most of the cost, performance, operations, and security benefits available to you. Our customers are increasingly leveraging multiple cloud service providers to create a custom multicloud environment to achieve their unique performance and financial requirements.
We get it—this can be a daunting task. That’s why we created an in-depth comparison of cloud services among the leading cloud providers (yes, we also include Google Cloud!).
Download a copy for yourself here: Comparing Services For The Big Three Cloud Providers