Microsoft Azure surpassed Amazon Web Services in 2021, according to new public cloud numbers from IDC.

On June 29, the research firm released figures that show Microsoft taking the top position by a close margin — 14.4% market share compared to Amazon Web Services’ 13.7%.

This isn’t the first time a report has placed Azure in the No. 1 slot. Earlier this year, Flexera did the same. And analysts throughout the cloud sector have predicted that Azure would indeed overtake AWS at some point.

Over at IDC, Microsoft, AWS, Salesforce, Google Cloud and SAP represented the top five public cloud service providers in 2021. Together, they captured about 40% of worldwide market share, with that figure growing nearly 37% year-over-year, IDC said.

In fact, the whole public cloud services market showed substantial growth in 2021, a year into the COVID-19 pandemic that still saw organizations supporting remote work, largely through cloud technologies. To that end, IDC says the global public cloud services market grew 29% year-over-year last year. Those stats include infrastructure as a service, platform as a service, system infrastructure software as a service and applications software as a service.

Overall, revenue from public cloud totaled almost $409 billion, according to IDC and its Semiannual Public Cloud Services Tracker. (IDC’s figures come up a little shorter than Gartner’s, which place the same public cloud numbers at almost $411 billion.)

Cloud Enables Digital Transformation

These public cloud numbers prove that organizations continue to align IT investments more closely with business outcomes and focus on digital transformation, said Rick Villars, group vice president, worldwide research at IDC.

IDC’s Rick Villars

“For the next several years, leading cloud providers will play a critical role in helping enterprises navigate the current storms of disruption – inflation, supply chain and geopolitical tensions – but IT teams will also focus more on bringing greater financial accountability to the variable spend models of public cloud services,” Villars said.

On that note, revenue from the services that support digital-first strategies saw revenue increase by nearly 39%, IDC found. Around the globe, organizations are opting for cloud services that support capabilities tied to computing, data and artificial intelligence. IDC expects IaaS and PaaS adoption to keep outpacing the wider cloud market. That’s because those technologies help organizations address the disruptions Villars cited, and accelerate digital transformation.

‘Challenging Times’

Dave McCarthy, research vice president within IDC’s cloud and edge infrastructure services practice, made a similar observation.

IDC’s Dave McCarthy

“The last few years have demonstrated that in challenging times, businesses increasingly rely on cloud services to modernize their operations and deliver more value to customers,” McCarthy said. “This trend is expected to continue as public cloud providers offer more ways of extending cloud services to on-premises data centers and edge locations. These expanded deployment options reduce many barriers to migration and will facilitate the next wave of cloud adoption.”

More Public Cloud Numbers: SaaS Is A Big Deal

Meanwhile, SaaS is a key player in all that momentum, too.

“SaaS applications remain the largest and most mature segment of public cloud, with 2021 revenues that have now reached $177 billion,” said Eric Newmark, group vice president and general manager of IDC’s SaaS, enterprise software and worldwide services division. “The tailwinds of the pandemic continued to fuel expedited upgrades and replacements of older systems in 2021, though company goals haven’t changed.”

For 2022, expect organizations to keep looking for applications “that will help increase enterprise intelligence, improve operational efficiency and drive better decision-making,” Newmark said.