In this context, we can understand more clearly the rationale for Nadella’s declaration at the top of Microsoft’s July 26 earnings call that “we will invest to take share and build new businesses and categories.” It’s a clear indication that Nadella is committed to reversing the trend revealed in the quarterly comparative numbers above.Īs I described in a piece last week called Microsoft Launches Market-Share War, and Customers Will Surely Win, both Nadell and CFO Amy Hood hammered home that theme of “taking share” throughout the entire earnings call as they specifically cited that ambition more than a dozen times. While only one-quarter the size of Microsoft Cloud, Google Cloud continues to grow much more rapidly as it, like Microsoft, addresses not only cloud infrastructure but also applications and related industry-specific solutions that businesses need so desperately today to keep pace with rapidly changing customer requirements. Here are the cloud-revenue growth rates for the past 5 quarters - and for clarity, I’m listing them by calendar quarters, even though Microsoft’s fiscal year starts July 1 and ends June 30. This is something I’ve pointed out before because what we’re talking about here is, after all, “the greatest growth market the world has ever known.” In that context, among all the ravenous growth monsters out there, it is illuminating to know who’s gobbling up opportunities more rapidly than its competitors are.Īnd if you look at the numbers for the past 5 quarters, the very unambiguous answer is that AWS is chewing into Microsoft’s previously unassailable lead in the cloud by the simple virtue of growing more rapidly. Yes, the market is enormous and will, I believe, continue to get bigger over the next few years - but as that is happening, AWS is expanding at a faster rate than the Microsoft Cloud business. As those staggering quarterly revenue figures get increasingly larger, it’s more and more difficult for Microsoft to maintain growth rates of 30% or more.īut beyond these Q2 figures in isolation, what we have here is an ongoing trend: AWS has grown more rapidly than Microsoft’s cloud business for 5 straight quarters in a row. Here are the Q2 growth rates and revenue totals for those three companies:Ĭlearly, Microsoft is by far the biggest cloud vendor.