One of the things that was not entirely clear when Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG), and Microsoft (NASDAQ: MSFT) announced their earnings was the extent to which Microsoft leads Alphabet in cloud market share. According to Cloud Zero, Amazon’s AWS has 28% of the market, Microsoft Azure has 21%, and Google Cloud Platform has 14%. Since their cloud businesses are a primary source of AI adoption, the figures are particularly important.
There is a second way to look at which company is likely to have the best cloud future. This is based on cloud revenue growth. In the most recently reported quarter, AWS revenue grew 37%. Microsoft’s growth was 43%, and Alphabet’s was 82%. Even at those growth rates, Alphabet may not catch its rivals soon, if it catches them at all.
Microsoft has a key set of advantages over Google. One is the installed base of Microsoft’s other software products across corporations. A huge number of companies already use Windows Server, Office 365, and Active Directory. Azure integration is likely much easier than Google Cloud integration.
Apparently, the availability of the Microsoft and Google products differs. “Region availability is limited in some geographies,” according to research firm Sotatek.
What is at stake? To a large extent, AI adoption. Cloud services integrate AI features and functions. With hundreds of billions of dollars on the table, this may be the most important single factor.