Azure sales up 93%
Microsoft (MSFT) is a bit opaque when it comes to its cloud computing figures. For example, the tech giant doesn’t specify the revenues generated by Azure, its key cloud product. Instead, like Twitter (TWTR) with its daily user metrics, Microsoft only discusses Azure’s growth rate. The company noted that Azure’s sales increased 93% year-over-year in 1Q17.
Intelligent Cloud revenues rose 11%
Microsoft (MSFT) nests its actual Azure sales under its Intelligent Cloud segment. This segment’s revenues of $6.8 billion in fiscal 3Q17[1. fiscal 3Q17 ended March 31, 2017] rose 11% from fiscal 3Q16[2. fiscal 3Q16 ended March 31, 2016] and topped the consensus estimate of $6.6 billion.
Azure is the Microsoft cloud product that competes directly with Amazon’s (AMZN) Amazon Web Services (or AWS). Revenues from AWS reached $3.7 billion in the latest quarter, rising 43% from a year earlier.
Azure growing faster than AWS
In the absence of actual Azure revenue figures to compare with AWS numbers, these competitors’ respective growth rates can offer important clues about Microsoft’s progress in the cloud computing market.
Looking at the recent growth figures for AWS and Azure, you see that while the growth rate is accelerating on the sides, Azure’s is outpacing AWS.
The perceived size of AWS relative to the competition could partly explain its slow growth. AWS’s large size means that breakout growth rate becomes difficult. However, increasing competition could also be a reason that AWS isn’t growing as quickly as it did in the past. AWS, being the dominant cloud provider, is the target of rivals such as Microsoft, Oracle (ORCL), and IBM (IBM).