Microsoft Beats Amazon in 12-Month Cloud Revenue

Incredible results, congratulations to Microsoft. What’s the combined annual run rate for the Top 5 providers now and is there a sensible breakdown in IaaS, PaaS and SaaS or is it predominantly combined reporting?

Microsoft may have better products or cloud services, but I’m not sure what’s the takeaway here. $23 vs $26.7 billion... okay, interesting... now tell us what share Amazon has vs Microsoft. Is the difference enough that Microsoft is a little bit behind or at this difference rate, would it still take Microsoft 3 years or 10 years to catch up? Maybe help understand what’s driving that.

Author also wrote this article, which if you look at his list of insights on why Microsoft is positioned better, has no substance. It reads more like an ad.

https://www.forbes.com/sites/bobevans1/2018/07/26/why-amazon...

Clickbait without substance.

Suggest that readers look at cloud revenue from a business model perspective, not a technology one.

Cloud revenues between Amazon and MS are comparable from an investment point-of-view:

- sticky (unless something bad happens, if you're a paying customer in month 1, you're probably still a paying customer in month 2)

- service delivered "in the cloud" (neither vendor needs a local brick/mortar storefront)

- fixed cost: data centers, variable cost: "things" in data centers

- for enterprise accounts: high-touch salesforce and dedicated contacts

- for end-user / SMB accounts: primarily self-service via online tools

Yes, one of them gets more revenue from IaaS and the other from SaaS. Each of these, and the specific submarkets that the two of them play in, will have different growth rates and potential and affect their respective valuation.

Still, from an investment standpoint, based on the above characteristics, I'd feel reasonably good about comparing the two of them on financial and valuation metrics for the "cloud" parts of their respective businesses.

That’s pretty interesting. One thing to keep in mind when thinking about aws cloud revenue, they bill internal teams for cloud revenue. I don’t know how much of aws revenue comes from internal teams, but at least part of it is essentially moving money around.

By that measure, FB is one of the biggest cloud provider in the world. That would be incredibly misleading. Do you have a source?