Which cloud computing technology is strong? Amazon vs. Microsoft

Last week, Amazon and Microsoft released quarterly financial reports at the same time. The dense financial data looked like a headache, but the author was still able to check the data of the two companies in the field of cloud computing.

Then the question is coming, which one is cloud computing? In fact, needless to say, I also know the answer, of course, Amazon. After all, people are the originator of cloud computing. They started to do it 8 years ago. Other manufacturers can only count as younger brothers.

So how strong is AWS? Amazon's latest financial report data gives us some clues that can be quantified - that is revenue.

Amazon's size is large, and AWS has not yet reached a level of revenue of more than 5%, in a single column. Although this is Amazon's fastest growing business.

AWS cloud computing is classified in Amazon's "Other" category. Although it's hard to know the specific proportion of AWS in this, I personally think that AWS should account for more than 90% of revenue in the "Other" category. For the sake of convenience, we have the right to be equal to "Other" when AWS is equal.

In the third quarter of 2014, AWS's total revenue was $1.382 billion, compared to $10.11 in the same period last year, an increase of 37%. In the first nine months of 2014, AWS's total revenue was $38.56, compared with $2.7 billion in the same period last year, a growth of 43%.

Although it is still growing rapidly, AWS's year-on-year growth rate actually shows a downward trend due to the volume. Of course, the 37% growth rate is actually acceptable, but this speed may not satisfy some investment bank analysts.

Last year, Macquarie Capital said in an investment bank report that in 2013 Amazon Web Services AWS is expected to receive $3.8 billion in revenue. If it is an independent company, its valuation can reach 19 billion to 30 billion US dollars.

In that report, Macquarie Capital expects AWS to have $3.8 billion in revenue in 2013, $6.2 billion in 2014, and $8.8 billion in 2015. In 2015, AWS will account for 7% of Amazon's revenue.

However, compared to recent financial data, Amazon AWS is estimated to be $5.5 billion in revenue this year, so growth is not as fast as expected.

So, is the problem coming again? Is Amazon's growth rate slowing down? I think the main thing is that the competitors are coming up - Google and Microsoft.

Google doesn't say much, its core business is search and Android, cloud computing basic services are not core business, so it is not so good. But there is a good company, that is Microsoft.

Microsoft is building data centers around the world, and there are currently 19 large areas covered, each with 16 football fields. Microsoft Azure is making a crazy investment. At least on the point of investing in the data center, Microsoft has already led Amazon.

However, in terms of revenue, Microsoft is still far behind Amazon. And there are still more behind.

Microsoft's Azure is also not listed separately, and is included in the business cloud business. It is also included in the Microsoft Business Cloud business, including Office 365 Enterprise Edition and Microsoft Dynamics.

Commercial Other includes enterprise services, enterprise cloud services (Azure is here), and other enterprise services, with revenues of $2.407 billion.

According to the financial report, I simply calculated that the revenue of the enterprise cloud service business is about 1.179 billion US dollars. I don't know the proportion of Azure in it, but Azure's share may be around 20%--30% compared to Office 365's corporate customer revenue. (just personal guess)

If calculated on a 30% basis, Azure's quarterly revenue may be around $350 million, which is quite different from Amazon's 1.382 billion.

However, Microsoft Azure is growing well. The earnings report revealed that revenue increased by 121% in the past quarter. If you can maintain this growth rate, it is not impossible to surpass AWS one day.

But to put it, cloud computing is just getting started, and the trillion-dollar IT market is big enough to accommodate several Amazon and Microsoft Azure.