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June 30, 2023
Ever since its inception, the true revenue numbers tied to Microsoft Azure have remained a mystery.
This week, U.S. antitrust regulators posted internal documents, now removed, on a court website that shed significant light on the financial state of the provider long considered the world’s second-largest public cloud computing firm.
Thing is, some industry analysts were starting to think that Azure was overtaking its behemoth rival, Amazon Web Services. As it turns out, that looks very much not to be the case, positioning Azure decidedly in second place between AWS and Google Cloud.
According to the now-vanished data, in the 12 months that ended June 2022, Microsoft Azure generated about half the revenue of Amazon Web Services, inarguably the world’s largest public cloud computing provider. Specifically, the totals showed that Azure brought in $34 billion in revenue over the aforementioned period. That compares with AWS’ $72 billion during the same time.
Google Cloud still hovered in the $6 billion-$7 billion range per quarter, keeping it in third place worldwide behind Microsoft Azure.
Here’s why this all matters.
For years, Microsoft has lumped Azure’s earnings into its “Intelligent Cloud” division, which also includes Windows Server, SQL Server and Enterprise Services revenue. As such, investors, analysts and industry observers alike have all been led, whether deliberately or not, to think that Microsoft Azure sales have been larger than they now appear to be. Consider that Intelligent Cloud’s most recent figures amounted to nearly $22.1 billion. That’s a hefty sum, but now Wall Street and others are left to wonder how much of it actually came from Microsoft Azure.
Meanwhile, key Microsoft Azure competitors, including AWS, Google Cloud and Oracle Cloud (widely viewed as the next up-and-coming hyperscaler) do share their cloud details.
One analyst so far has come forward to exhort Microsoft to disclose Azure’s revenue from here on out.
“[W]hile there’s no suggestion Microsoft is involved in any funny business, the only way to stay above such concerns is with greater transparency,” Holger Mueller, vice president and principal analyst at Constellation Research, told Silicon Angle. “Microsoft is not obliged to share Azure revenue, but such transparency would be appreciated by customers and investors alike.”
All credit for the new Microsoft Azure insight goes to The Information for its eagle eye in spotting the court document (briefly) posted this week. We imagine there was quite a behind-the-scenes scramble on the part of Microsoft Azure execs once they realized the antitrust authorities had published numbers.
U.S. antitrust officials are looking into Google Cloud’s recent complaint that Microsoft Azure is using unfair business practices.
Read more about:Channel Research
Contributing Editor, Channel Futures
Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.
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