Amazon.com, Inc. AWS Makes Almost Ten Times The Revenues Of Microsoft Corporation’s Azure


Amazon.com, Inc. (NASDAQ:AMZN)’s AWS generates about $6 billion of revenue annually according to an estimate by Deutsche Bank. This would be almost 10 times the size of revenue of Microsoft Corporation (NASDAQ:MSFT)’s Azure cloud. However, earnings from both platforms are believed to be break-even at this stage as both companies are rapidly pouring resources into growth. AWS may be ahead of rivals in revenue and adoption, but Azure is growing rapidly.

Analysts at Deutsche Bank believe have figured out the performance of Amazon’s cloud platform known as Amazon Web Services (AWS) and Microsoft’s Azure. According to the analysts, Amazon is way ahead of competition in terms of cloud revenue, but pressure is mounting as Microsoft, Google Inc (NASDAQ:GOOGL) and International Business Machines Corp. (NYSE:IBM) accelerate their cloud campaigns.

In annual revenue, AWS brings about $6 billion to Amzon.com, Inc. (NASDAQ:AMZN) in revenue, but the business isn’t currently profitable. Amazon is expected to make its first detailed financial disclosure of its cloud business when it reports its 1Q2015 results.

Azure accounts for about 2% of revenue

Microsoft’s Azure is equally unprofitable at this stage, only said to be break-even at best, but generates between $500 and $700 million of revenue each year. That means that the division accounts for just about 1-2% of Microsoft’s total annual revenue.

Azure showing rapid growth

Azure may be bringing in smaller amount of revenue currently compared to Amazon’s AWS, but the service is gaining traction very fast with substantial growth expected this year. In a recent development, Microsoft has demonstrated efforts to push the adoption of Azure far beyond the previous estimates, inking a new $25 million enterprise deal for Azure and hoping to sign more such deals. Azure adds an average of 10,000 new users every week and brings about $175 million each quarter.

Cloud market projections

Cloud infrastructure market is growing rapidly and is expected to reach $17 billion this year and then double to $34 billion by 2018.

Amazon.com, Inc. (NASDAQ:AMZN)’s AWS is expected to maintain a larger lead in the cloud infrastructure market over major rivals Microsoft, IBM and Google. IBM recently announced $5 billion fresh cloud investment to bolster its Internet of Things program.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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