Don’t be fooled: Microsoft’s cloud business is not bigger than that of Amazon’s AWS, although that’s the immediate implication.
Whether it’s better is another matter, and that could be what helps tip the balance Redmond’s way in this neck-and-neck business.
Amazon used the occasion of its first-quarter results on Thursday to finally, clearly report how much money it makes from AWS. It was the day Microsoft announced its third-fiscal quarter too.
Cloud, with server and the Surface computer, were the only bright spot in the Windows’ results, as people continued to resist buying Windows PCs.
Overall, Microsoft would seem to be the bigger of the two cloud companies.
The company makes comparisons difficult, because it reports cloud in two different business units that also include income from other products.
However, take the top line and you have: a $2.28 billion in Microsoft's devices and consumer other unit, that’s home to Office 365 Home and Personal but also Xbox games and online ads.
Commercial other unit was $2.76 billion – this unit includes Azure and Office 365 for business and online Dynamics CRM online and enterprise services.
Microsoft’s two units grew 16 and 45 per cent respectively year on year and cloud accounted for a quarter of Microsoft’s total revenue of $21.73 billion for the three months.
Switch to AWS, and the numbers are teeny tiny: $1.57 billion – up 49 per cent, but just seven per cent of Amazon’s overall money.
Just don’t get carried away: remember Microsoft has obfuscated its cloud business by combining it with money from other products in those two units.
Also, Amazon comes at this as a purely infrastructure-as-a-business, while Microsoft is offering this with Azure plus software-as-a-service with Office 365.
You need to therefore take Office 365 out of the mix and compare Azure to AWS. Here, the race is cheek by jowl.
At last count, Microsoft in 2013 claimed Azure was a one-billion-dollar business but that statement was, yet again, an exercise in obfuscation, including revenue from software sold to partners to run cloud services on Windows and SQL Server. Also, it was impossible to check the figure.