Azure vs. AWS - Who owns the crown?

A short while ago, on January 25, Microsoft reported its Q2/2022 numbers and on February 3, Amazon reported its Q4/2021 and the fiscal year 2021 results.

With that, we have two of the biggest IaaS and PaaS vendors presenting growth numbers.

Of course, and as usual, they are doing their utmost to make them kind of incomparable, as their services are not covering the same scope. Still, let me take a stab at creating some kind of comparatibility.

Detailed functional scope apart, the Microsoft area that can get compared most meaningfully is the Intelligent Cloud division. This consists of two parts, the Azure and other cloud services and server products, which Microsoft reports separately.

As you can see in the diagram, overall revenue grew with 26% year over year. In more detail, Azure grew 46% and the the server products part grew 6%. The question that, of course, is not answered, is how much revenue does Microsoft make with Azure?
Amazon today reported AWS revenue of $17.78 billion, which is up 40% year over year.

This answers the growth question.

Azure grew six percentage points faster than AWS and gets the growth crown.

The Microsoft Intelligent Cloud business is also bigger than AWS.

But wait, it includes server products in addition to Azure.

On the other hand AWS has some portion of application business.

Still, let us pretend that AWS and Microsoft's Azure businesses are comparable. With that the question arises how big Microsoft's Azure business really is.

The good news for us is that Microsoft provided enough numbers to do some math (sorry, it gets a little technical in the next lines).

We have:

Current revenue at $18.33 billion
Q2/21 revenue at $14.6 billion
Growth rates of both parts of the business with 46% for Azure and 6% for the server products

We know that

1.46 times the Azure revenue of Q2/21 plus 1.06 times the server products revenue of Q2/21 computes to the Q2/22 revenue of $18.33.
0.46 times Azure revenue of Q2/21 plus 0.06 times server products revenue computes to the reported growth of $3.73 billion.

Two variables, two equations, that should be solvable.

Long story short with a bit of rounding (and hopefully without the major embarrassment of math errors), Azure revenue of Q2/22 should have been around $10.42 billion, which is around 59% of the AWS Q4/21 revenue. As said, this is geared somewhat towards AWS, as Amazon's revenue of $17.78 billion includes a bit of SaaS as well, whereas Azure numbers do not.

Still, the numbers show that Amazon continues to lead the IaaS/PaaS pack by quite a margin

In my snap analysis about Microsofts's numbers I took the wild guess of Azure having a revenue of around 60 - 65 percent of AWS.

Turns out it wasn't that wild.

April 26, 2022, corrected the faulty calculation of the MS Azure revenue and with it its relation to the AWS revenue

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