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Microsoft gains competitive edge over AWS in cloud computing market

Microsoft outcompetes AWS in fourth quarter of 2017

While Microsoft and Amazon Web Services (AWS) have both been deemed leaders in infrastructure-as-a-services (IaaS) and platform-as-a-service (PaaS) segments, the former is gaining a competitive edge over the latter, according to research from KeyBanc analysts cited by CNBC.

Microsoft clenched the win over AWS for the fourth quarter of 2017. While AWS share dropped from 68% to 62% in the quarter, Microsoft Azure market share in the cloud computing market increased from 16% to 20%. Google’s share also increased from 10% to 12%, according to the researchers.

KeyBanc reports Azure likely contributed approximately $3.7 billion to Microsoft’s total 2017 revenue, which clocked in at about $96.6 billion. The company made major investments in Azure, in addition to adding several data centers in the U.K. and elsewhere. KeyBanc projects that Microsoft’s Azure platform will grow another 88% next year.

The KeyBanc report also contrasted the artificial intelligence tools of three major cloud providers. The report noted Microsoft “has more pre-built models than other public cloud vendors,” making them available at data centers around the globe. The analysts increased Microsoft’s 12-month price target from $94 to $106 due to Azure growth and potential opportunities within the realm of artificial intelligence (A.I.).

“After our conversations with leaders at Microsoft, we came away believing the majority of revenue will come from the surrounding infrastructure costs, rather than the monetization of specific AI services, due to the required intensive model training and ongoing inference,” KeyBanc’s Brent Bracelin and other analysts wrote in a note.

Microsoft is attempting to further expand its cloud offering portfolio by recently agreeing to purchase data storage startup Avere Systems for an undisclosed amount. Additionally, Microsoft announced it is partnering with Nordcloud, described as “Europe’s fastest growing public cloud provider,” in an effort to “boost the spread of A.I.” and machine learning services to Nordcloud customers throughout Europe. AWS recently announced it is partnering with health technology companies Cerner as well, with a focus on leveraging medical data resources to improve health and healthcare.

ABOUT AUTHOR

Nathan Cranford
Nathan Cranford
Nathan Cranford joined RCR Wireless News as a Technology Writer in 2017. Prior to his current position, he served as a content producer for GateHouse Media, and as a freelance science and tech reporter. His work has been published by a myriad of news outlets, including COEUS Magazine, dailyRx News, The Oklahoma Daily, Texas Writers Journal and VETTA Magazine. Nathan earned a bachelor’s from the University of Oklahoma in 2013. He lives in Austin, Texas.

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