A badly redacted Microsoft document reportedly revealed that the vendor’s Azure cloud server business revenue in the 2022 fiscal year generated half the revenue of rival Amazon Web Services.
Microsoft has long reported the quarterly growth rate of Azure, software subscriptions and other cloud services combined. This has given analysts difficulty when comparing Microsoft’s revenue to AWS – which does report cloud server sales.
The Information said the Volish document from June 2022 was accidentally published on a US district court website, revealing that Microsoft expected Azure cloud server business revenue of $34 billion for the 12 months ended that month.
The figure is about half that of the $72 billion AWS reported for the same period and means Azure’s share of the market was several percentage points smaller than some analyst firms had estimated.
This seems to confirm the Channel view that customers develop in AWS and Azure before settling on Amazon.
Where the Vole cloud is king is normal Microsoft services such as Active Directory or Office 365 but new services are going to Azure.
That $34 billion figure came from documents posted on a U.S. district court website that hosts files related to the lawsuit by the Federal Trade Commission (FTC) concerning Microsoft’s $69 billion acquisition of gaming company Activision Blizzard. The Azure documents and others were removed from the court website due to improper redaction.
The document also revealed that Microsoft put its global cloud server market share at 16 percent compared to AWS’ 38 percent. Around that time, research firm Gartner put Microsoft at 21 percent and AWS at 39 percent, according to The Information. The gap between the two vendors has possibly changed since.
In the June 2022 document, Nadella warned about slowing Azure growth and less spending from 79 Azure customers meant Microsoft falling below an undisclosed internal target.
On Microsoft’s July 2022 earnings call, Chief Financial Officer Amy Hood said that Azure consumption growth saw a “slight moderation” while Nadella focused on “larger and longer term commitments” during the vendor’s July 2022 earnings call.
The vendor also blamed “partner transition work” for a hit on the vendor’s revenue during that call.
Microsoft reported its “intelligent cloud” segment – which includes Azure – made $75.3 billion in revenue for the 12 months ended June 30, up 25 percent year over year. Operating income was $33 billion for that period, up 25 percent year over year, according to Microsoft.
