Microsoft Azure sales now reach 75% of those of AWS. But Azure’s revenue is only half that of AWS five years ago.
The growth of Microsoft’s cloud division is driven by the craze for AI. “Azure and cloud revenue growth is driven by AI,” said Amy Hood, Microsoft’s chief financial officer, while presenting fourth-quarter 2023 results. She added that AI’s contribution Azure’s revenue growth was 6 percentage points, compared to 3 percentage points in the third quarter.
But these revenues are also the result of heavy investments. Microsoft has been adding GPUs to its data centers over the period to allow customers to run AI models directly in Azure.
53,000 Azure AI customers
“We now have 53,000 Azure AI customers,” said Microsoft CEO Satya Nadella.
“The market has the impression that Microsoft is the leader because of the enthusiasm for AI and its close relationship with OpenAI” even explains Jamin Ball, partner at Altimeter Capital.
AWS, for its part, took months to offer a model capable of competing with GPT-4, with Bedrock. Amazon has also invested in generative AI startup Anthropic.
Azure is growing much faster than AWS
Last year, during Amazon’s fourth quarter earnings conference call, CEO Andy Jesse highlighted that “AWS offers the broadest range of compute instances using Nvidia chips,” adding that ” clients like Airbnb and Snap use our own AI processors.
He also said that generative AI “is expected to generate tens of billions of dollars in revenue for Amazon over the next few years.”
For now, though, Azure is growing much faster than AWS. Microsoft’s Azure revenue represented about 29% of its total revenue in the company’s fourth quarter of last year. AWS revenues only increased 13% year over year.
“We expect Azure activity to accelerate in the next fiscal year or second half as new workloads from new cloud deployments and generative AI initiatives ramp up significantly. significant,” said Yun Kim, an analyst at Loop Capital.
Source: “ZDNet Korea”