Enterprise adoption of Microsoft’s Azure in 2019 tripped up AWS growth last year

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Email Twitter: @MindHead1 Feb 21st, 2020 inNews

What was once thought of as the impenetrable giant in Amazon’s AWS market share seemed to be a bit under fire in 2019 by the continued enterprise adoption of Azure.

According to a market analysis report from Canalys, Microsoft’s Azure cloud business encroached on AWS’s market share growth in 2019.

Canalys reports that AWS went from 33.4% of the global market share in Q4 2018 down to 32.4% during the same timeframe in 2019 while Microsoft increased from 14.5% in Q4 2018 to 17.6% in 2019. Over the entirety of 2019, AWS sat at 32% while Microsoft grew from 14.2% to 16.9%.

Despite the seeming back and forth between AWS and Azure during 2019, the year turned out to be a relatively positive one for all cloud service providers, proving that there continues to be a high ceiling on revenue and profits for businesses in the near future.

“Competition among the leading cloud service providers continued to intensify. AWS still outpaced its competitors in real US dollar terms. Its business was US$2.4 billion bigger in Q4 than in the same period in 2018. Its investment in new enterprise sales and marketing resources combined with the general availability of AWS Outposts and the launch of AWS Local Zones will drive further growth.

Microsoft Azure’s growth rate was higher in the quarter, as it gained traction in enterprise accounts and benefited from its extensive channel reach. Microsoft stepped up its messaging to partners to drive Windows Server 2008 workloads to Azure as support comes to an end.

Google Cloud continued to make progress in penetrating new enterprise customers and developing its network of channel partners. It has substantially grown its internal enterprise salesforce over the last year and brought partners under its field organization for closer alignment.

Alibaba Cloud remained the leader in China as its growth re-accelerated. It aims to expand its enterprise customer base across the rest of Asia Pacific and Europe, where it is using two-tier distribution.”

The increased demand is evident by the Canalys’ summary of capital expenditures businesses reported in 2019 that include Alibaba, Amazon, Baidu, Facebook, Google, Microsoft and Tencent-collectively spending upwards of $60 billion in data center infrastructure for the year.

Interestingly enough, Canalys’ principal analyst Matthew Ball notes that despite the increasing market share of competitors in the industry, the biggest buyers in the sectors remain providers such as Amazon, Google, Microsoft, and others. With an 8% increase in spending, up from 2018, “cloud service providers will remain the largest buyers of servers and related components over the next five years.”

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