News

Report: Microsoft Chasing Cloud Leader AWS with 93 Percent Growth Rate

• By David Ramel
• 05/15/2017

The latest quarterly research report from Canalys shows Amazon Web Services Inc. (AWS) is still the market-leading cloud provider, but Microsoft's Azure is coming on strong with a 93 percent growth rate.

In releasing numbers for Q1 2017, Canalys said AWS' market share of the cloud infrastructure services market was 31 percent. While that's down slightly from the 33.8 percent reported in the Q4 2016 report, AWS still has more than double the market share value of its primary competitor, Microsoft Azure.

The Azure cloud is increasing its challenge, though, as its 93 percent growth rate dwarfs AWS's 43 percent rate. The year-over-year growth rates for Google and IBM were 74 percent and 38 percent, respectively.

In the competition for enterprise customers, cloud providers are looking to the channel to expand their reach, Canalys said.

"AWS has an established channel program that is growing and is cited by the company as helping to win key global clients," the company said. "Microsoft's growth in Q1 2017 demonstrates the benefit of having a huge enterprise client base and converting it to Azure. Many of the leading enterprise vendors are building on Azure Stack, Microsoft's latest cloud initiative, to provide customers with hybrid solutions."

The overall cloud infrastructure services market grew by 42 percent year-over-year in Q1 2017, Canalys said, up from the 49 percent reported for Q4 2016.

"Go-to-market strategy, including both customer and channel partner engagement, will ultimately determine vendor success in this segment," said Canalys analyst Jordan De Leon. "Larger enterprises will adopt a multi-cloud strategy to distribute risk. Ultimately, to challenge AWS, vendors will need deep financial resources to continue to participate and advance."

Several cloud market research studies, including this one published last month by Gartner Inc., have indicated the cloud market is becoming somewhat of a two-horse race, with Azure gaining ground in some customer segments while exhibiting a faster growth rate, though it's still far behind in total market share.