I assume over the long haul they will be the low cost producer. They need to learn to sell and support in a higher touch manner to bring in the large corporates.
Microsoft's Enterprise sales force is second to none and they are clearly the number 2 in the cloud space. However, shifting office365 (a SAAS offering) to be reported as cloud revenue is disingenuous.
I wouldn't say second to none as Oracle's Enterprise sales force are better, and likely much better rewarded.
However if you combine the whole package, from sales, product, after sales services, etc. Microsoft is so far ahead of AWS, and Google doesn't know anything about human interaction / Sales.
Cloud is generally accepted as a series of P / IAAS offerings, where clients are paying for infrastructure. Office365 is a SAAS offering, where clients are paying for software that does something, that happens to be hosted in the cloud. In the context of Microsoft's, Google's, Amazon's cloud businesses, Microsoft is comparing apples & oranges to everyone else's oranges.