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Microsoft Beats Amazon in 12-Month Cloud Revenue

forbes.com

41–50 of 120 posts

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#41
post #12
post #5

These numbers are very misleading considering they wrap up things like Office into “cloud revenue.” When talking about compute cloud they are still way behind Amazon although you don’t get that from the misleading headline.

This is nearly a "no true Scotsman" definition of cloud revenue, where if Amazon doesn't have a product in a market segment it shouldn't count. Google and Microsoft both have offerings in the cloud SaaS office suite market segment, and it's a real liability for Amazon that they do not.

But if that's the case why not consider Google search under cloud reveneue and call it a day?

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#43

Earlier quoted context omitted.

Not really. When people buy Office 365, they're primarily purchasing a the MS Office product, and the cloud just happens to be the mechanism of delivery. That doesn't really make this cloud revenue. Imagine if MS was forced to "unbundle" Office 365. Consumers could purchase a license to run MS Office on any platform. On of which might be hosted Azure. What percent of the Office 365 revenue would accrue to the product…

>Not really. When people buy Office 365, they're primarily purchasing a the MS Office product, and the cloud just happens to be the mechanism of delivery. And when people buy Amazon RDS, they're primarily purchasing a database product, and the cloud just happens to be the mechanism of delivery. Imagine if Amazon was forced to "unbundle" Amazon RDS. Consumers could purchase a license to run the database on any platfor…

But there are unbundled DBs that people run. PostgreSQL, mongo, MySQL and the majority of those are run on the AWS cloud.

There is clearly a distinction here. For example, I don’t know if the word Azure is even mentioned when I go to buy an O365 license.

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#44
post #31

Very anectodal, but some things are better on Azure, because they were late to the party, for example azure blob storage. It costs the same as s3, but it supports journaling, so you can do journal archives. You can run your main thing on aws and keep backups on azure. If you wanted backups with journaling on AWS, you'd have to use EFS at minimum, which is orders of magnitude more expensive.

And some things are very much worse. I feel like if you stick to MS technology feature you are probably going to be ok but my anecdotal evidence around other features built around open source tech has been not good. For example AKS (azure kubernetes service) has been problematic for us. Similarly AWS RDS is much better than Azure PostgreSQL offering.

what is problematic on aks?

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#45
post #12
post #5

These numbers are very misleading considering they wrap up things like Office into “cloud revenue.” When talking about compute cloud they are still way behind Amazon although you don’t get that from the misleading headline.

This is nearly a "no true Scotsman" definition of cloud revenue, where if Amazon doesn't have a product in a market segment it shouldn't count. Google and Microsoft both have offerings in the cloud SaaS office suite market segment, and it's a real liability for Amazon that they do not.

I'm not really sure how my copy of Excel and Word running on my work laptop (and subscribed to monthly) should qualify as "cloud revenue".. We do host our email on their cloud servers, but according to their own sales team, that is worth $5/month per subscriber for email only. Yet we pay $20/month per user for the full office suite installed on their systems. (and more for people with other tools like Microsoft Visio and Project) Its not a "no true scotsman" its that many of their products have no cloud component at all.

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#46
post #45
post #12

Earlier quoted context omitted.

This is nearly a "no true Scotsman" definition of cloud revenue, where if Amazon doesn't have a product in a market segment it shouldn't count. Google and Microsoft both have offerings in the cloud SaaS office suite market segment, and it's a real liability for Amazon that they do not.

I'm not really sure how my copy of Excel and Word running on my work laptop (and subscribed to monthly) should qualify as "cloud revenue".. We do host our email on their cloud servers, but according to their own sales team, that is worth $5/month per subscriber for email only. Yet we pay $20/month per user for the full office suite installed on their systems. (and more for people with other tools like Microsoft Visio…

The copy of Word and Excel on your laptop have cloud integration. You can do collaborative document editing a la Google Docs through the desktop copies or the web app versions.

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#47
Disclosure: I work on Google Cloud.

There are arguments on both sides about "Should Office count as Cloud revenue?". We have the same decision regarding GSuite. If you take the "Cloud is anything a business depends on" argument, then it obviously should count (but then all sorts of things like SaaS would count).

I like to think of this from an investor's standpoint: what do they really want to know? In my estimation, they want to know about potential hyper-growth market opportunities for the company.

For Microsoft, more than anyone else, Office isn't a high growth opportunity. There is some amount of revenue uplift from customers "upgrading" from Office on prem to Office 365 (like Adobe when they forced Creative Suite to be subscription) but I doubt there are going to be lots of net new customers just because Office is on a subscription model. By contrast, Cloud infrastructure is a large opportunity for Microsoft.

For Google (and to some degree AWS), "productivity suites" is actually a reasonable growth market, particularly as market share often comes from Office. However, the raw productivity market is still "only" $XXB (it's predominantly $X/seat, and there are only so many employees in the world) while people talking about "cloud" usually are talking about the opportunity being "all money spent on IT".

tl;dr: I watch the YoY "Azure growth was XX%" numbers and ignore the headline revenue.

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#48
post #45
post #12

Earlier quoted context omitted.

This is nearly a "no true Scotsman" definition of cloud revenue, where if Amazon doesn't have a product in a market segment it shouldn't count. Google and Microsoft both have offerings in the cloud SaaS office suite market segment, and it's a real liability for Amazon that they do not.

I'm not really sure how my copy of Excel and Word running on my work laptop (and subscribed to monthly) should qualify as "cloud revenue".. We do host our email on their cloud servers, but according to their own sales team, that is worth $5/month per subscriber for email only. Yet we pay $20/month per user for the full office suite installed on their systems. (and more for people with other tools like Microsoft Visio…

Microsoft gloms together the pay-per-use/subscription part that totally doesn't need "the cloud" (Office apps) along with the other bits that do (email, Skype/Teams, OneDrive, etc.). It makes sense that they do from a financial reporting perspective, because they sell them and you buy them as one thing.

How exactly should they split out the email or OneDrive component from Word or Excel of your $10-20/month? I don't think there's really a sensible way to do it without overcomplicating things.

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#49
post #12

Earlier quoted context omitted.

This is nearly a "no true Scotsman" definition of cloud revenue, where if Amazon doesn't have a product in a market segment it shouldn't count. Google and Microsoft both have offerings in the cloud SaaS office suite market segment, and it's a real liability for Amazon that they do not.

Amazon does have a cloud SaaS office suite, actually -- Amazon WorkDocs / WorkMail / WorkSpaces. I've hardly ever heard of businesses using them, though; Office 365 and Google Apps have the market pretty well locked down. I feel like there is a fundamental distinction to be made between infrastructure services (like AWS S3, EC2, RDB, etc) and end-user services (like Office 365). Combining the two doesn't make a lot o…

Do Amazon employees use these tools themselves?

Re: Microsoft Beats Amazon in 12-Month Cloud Revenue

#50

Very anectodal, but some things are better on Azure, because they were late to the party, for example azure blob storage. It costs the same as s3, but it supports journaling, so you can do journal archives. You can run your main thing on aws and keep backups on azure. If you wanted backups with journaling on AWS, you'd have to use EFS at minimum, which is orders of magnitude more expensive.

Azure Blob Storage also supports immutable blobs (they can't be overwritten or deleted once written to), which is interesting for various compliance and auditing scenarios:

https://azure.microsoft.com/en-gb/blog/azure-immutable-blob-...

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