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The $76-billion global cloud infrastructure services market has once again been captured by the big three with a 67% combined market share. Amazon continues to dominate the cloud market with a 31% share, taking a 1% hit from the previous year. Microsoft, on the other hand, has been surging forward.
Microsoft Azure is the King
Microsoft Azure has shown steady growth in the cloud sector, showing an increased capture of the market. The recent quarter’s cloud revenue was $35.1 billion, which was up 23% year-on-year (YoY). The company is closely trailing Amazon with a global cloud market share of 25%.
Microsoft’s large spread of AI offerings across its enterprise suite is proving to be its golden egg (the goose being OpenAI).
“Our AI innovation continues to build on our strategic partnership with OpenAI. More than 65% of the Fortune 500 now use Azure OpenAI Service,” said Microsoft chief Satya Nadella, in a recent earnings call.
Nadella also confirmed that the quantity of Azure deals valued at over $100 million rose by over 80% compared to the previous year, while the number of deals exceeding $10 million more than doubled.
Guided by Nadella’s strategic brilliance, Microsoft’s cloud share has been advancing by 1% each quarter, mirroring the deliberate steps of the king on a chessboard.
Copilot Mode ON
Microsoft’s Copilot is proving to be the backbone for AI-powered products for its customers. “30,000 customers across every industry have used Copilot Studio to customise Copilot for Microsoft 365 or build their own, up 175% quarter-over-quarter,” said Nadella.
In the earnings announcements, Nadella spoke at length about Copilot’s applications across domains. He claimed that almost 60% of Fortune 500 companies use Copilot and have witnessed an accelerated adoption across industries such as Amgen, BP, Cognizant, Koch Industries, Moody’s, Novo Nordisk, NVIDIA, and Tech Mahindra purchasing over 10,000 seats.
“We’re not stopping there. We’re accelerating our innovation, adding over 150 Copilot capabilities since the start of the year,” said Nadella.
While Microsoft skyrockets, Google has maintained its 11% share of the cloud market.
Source: X
Google Cloud Remains Resilient
Google witnessed staggering growth in the recent quarter with 15% revenue growth YoY and a net income of $23.7 billion, which is a jump of 57% from the previous year. The company attributes a considerable chunk of growth to Google Cloud.
“Today, over 60% of funded GenAI startups and nearly 90% of GenAI unicorns are Google Cloud customers,” said Google chief Sundar Pichai. The company posted an operating income of $900 million on cloud services. The company even acknowledged that the growth across the cloud is underpinned by the benefits of AI.
In cloud, Google has announced over 1000 new products and features in the past eight months.
AI Integration Continues for AWS
Though Amazon saw a 1% dip in the recent results, Amazon is not backing down in any way. AWS’s segment sales increased 17% YoY to hit $25 billion, and the company has been extensively investing in bringing AI on their platform.
Recently, AWS announced the general availability of Amazon Q, which is the company’s most advanced AI-powered assistant. Amazon Q will be available in three forms to assist developers, enterprises, and Q apps, enabling companies to build generative AI apps using their company data.
“The combination of companies renewing their infrastructure modernisation efforts and the appeal of AWS’ AI capabilities is reaccelerating AWS’ growth rate,” said Andy Jassy, Amazon’s president and CEO. The company is at a $100 billion annual revenue rate.
Amazon Bedrock, AWS’s generative AI service that allows users to leverage the latest LLMs for building AI applications, also witnessed remarkable numbers in the recent quarter. Amazon confirmed that thousands of organisations worldwide are using Amazon Bedrock.
