State of the cloud: Microsoft surges, AWS drives company's operating profit

Dive Brief:

Microsoft Azure grew 93% year-over-year in the first quarter of 2017, according to financial reports released late last week, CNBC reports. Amazon Web Services (AWS) grew 43% during the same period.
While Google doesn’t break out its cloud revenue, the company’s "other" category, which includes its cloud offerings, grew close to 50% in the first three months of 2017.
Though AWS’ growth was strong, it appears to be slowing a bit for the first time. But the cloud operation is still responsible for driving Amazon's operating income. In Q1, AWS accounted for 89% of the company's total operating income of $1.01 billion, according to Market Watch. The rest the company attributed to e-commerce.

Dive Insight:

It was a rare event for sure: all three major cloud companies reported quarterly earnings on the same day, allowing for a quick glimpse at cloud market performance. Overall, it is still seeing huge growth. For all three companies — Amazon, Microsoft and Google — cloud services are growing faster than their older businesses, which speaks volumes about demand and the potential for future investments.

But surprisingly, Microsoft appears to be making a come-from-behind bid for a bigger slice of the market. Experts say Microsoft is excelling in two specific areas: hybrid deployment and cloud migration. In the area of cloud migration, the company is successfully using Office 365 to help lead companies into the cloud. With vendor loyalty playing a part, if a customer is pleased with Microsoft's services, it might be inclined to stick with its other products.

While it is difficult to tell how well Google is doing, considering it does not break out the numbers, the company is continuing to push its enterprise offerings. Google cloud leader Diane Greene recently said she believes her company can overtake AWS and become the biggest cloud provider by 2022.

A study released by Synergy Research Group in February found AWS now controls about 40% of the cloud market, while Microsoft, Google and IBM together control only about 23%. Though Microsoft's cloud business is rapidly growing, it will take a lot for the company to catch up to AWS.