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How Microsoft’s Azure Performed in Fiscal 2Q18

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Mar. 7 2018, Updated 9:02 a.m. ET

Azure premium services record triple-digit growth for 14th-straight quarter

In the preceding part of this series, we discussed how the acquisition of PlayFab could strengthen Microsoft (MSFT) Azure’s gaming capabilities. In January 2018, Microsoft announced the acquisition of Avere Systems in an effort to boost Azure’s performance.

Azure’s revenues grew 98%, with Azure premium services revenues reporting triple-digit growth for the 14th-straight quarter in fiscal 2Q18. Microsoft’s Azure premium services consist of higher-level databases such as Azure DB, Cosmos DB, data services, AI (artificial intelligence), and IoT (Internet of Things) services.

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Amazon’s AWS leads, but Microsoft’s Azure is gaining momentum

Microsoft does not provide Azure’s revenue figures, but that has not stopped some industry analysts to guess what they may be.

In the recent past, we discussed the results of a report released by KeyBanc analysts in January 2018, which stated that while Amazon.com (AMZN) continues to be the undisputed leader in the cloud space, it lost market share in 4Q17 in the public cloud space. Amazon’s AWS (Amazon Web Services) had a 62% market share in 4Q17, compared with 68% in 4Q16.

Meanwhile, Azure’s market share rose from 16% in 4Q16 to 20% in calendar 4Q17. (Previously in this series, we discussed increased adoption of Azure in public cloud space.) Google’s (GOOG) market share rose from 16% to 20% in 4Q17.

According to Synergy Research report, the top four players—Amazon (AMZN), Microsoft, Google, and Alibaba (BABA)—all boosted their market shares in calendar 4Q17. Microsoft recorded the maximum gain in its market share, and it’s very likely that Azure’s increased adoption and penetration is what helped Microsoft to secure the largest cloud space market share gain.

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