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Could Microsoft’s Cloud Business Be Bigger than Windows by 2021?

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Dec. 12 2018, Updated 8:07 a.m. ET

Microsoft’s cloud computing business growing at a rapid rate

According to a report from CNBC citing KeyBanc analysts, Microsoft’s (MSFT) “cloud business could be bigger than Windows by 2021.” If this prediction comes true, it will be a big shift from what Microsoft has been known for, its Windows operating system.

Microsoft doesn’t report revenues for Windows and its cloud platform Azure separately. However, Azure has been clocking 75% plus revenue growth on a year-over-year basis over the last several quarters. According to a report from Synergy Research Group, the overall cloud infrastructure market grew by 45% in the last quarter. Amazon (AMZN) dominates this market with a 34% market share. However, Amazon reported that its cloud business, Amazon Web Services, grew by 46% in the last quarter. This growth shows that Microsoft is taking market share away from Amazon in the fast-growing cloud services market.

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Windows, on the other hand, is a more steady business for Microsoft. Some Windows releases haven’t gotten a good response, while some have. For example, when Windows 8 was released, it received a tepid response from users. Windows 10, on the other hand, received a good response, and Microsoft aimed to have a 1 billion installed base for Windows 10 by the end of  2018.

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