[Eclyps]

There’s not much to the article right now (developing story), but how big of a blow is this to Amazon? And how big of a boon to Microsoft? I realize that this is likely because of the people that I surround myself with, but I don’t know anybody who actually uses Azure. Is Azure’s core business large corporations/government?

[hannibalhorn]

$1B/year is quite a bit, would have been 4% of AWS's business. I suspect it will positively impact Azure more but havn't paid much attention to their numbers.

Not that it's relevant, but I actually signed up with Azure a couple months ago just to build an open source project on a cloud copy of Windows 10 with Visual Studio. I still ran into a bunch of problems with licensing type stuff, and wound up getting calls & e-mails from a sales rep. I'm glad there's some decent competition, but definitely prefer Amazon.

Edit: Corrected percentage, thanks to statguy.

[vmurthy]

The monetary benefit is one big thing but in the B2B scheme of things , a big success story like this would be very easy to convince other government organisations and government in other countries to adopt Azure if they haven’t moved to the cloud already. It’s the new “No one ever got fired for suggesting IBM”.

[Aperocky]

Really? Why would a foreign country trust a firm deeply engrained with the US military?

Then again, there are only a few military in the world that need this kind of service, and those countries are highly unlikely to go with foreign entities as provider.

[discodave]

Yes. Other countries, particularly the "five eyes" are already deeply engrained with the US military, and they are rich countries with lots of money.

Five Eyes: USA, Canada, UK, Australia, New Zealand

Then you have all the other wealthy countries with close ties to the US: Germany, Japan, etc.

[vmurthy]

Agree that not all countries would do this. But Allies? Also don’t other countries use AWS Gov ( or whatever it is called ) even though it AWS is “deeply embedded” in the US gov scheme of things?

[Aperocky]

It would not be politically expedient. US allies are mostly democracies consisting of people that don't want to spend on the military if they don't have to, and if they have to, better to spend it domestically instead of giving it to a foreign firm.

Europe have its own fighter, armor, command systems despite being US allies militarily.

[zxcmx]

Suspect the parent poster was thinking primarily about the other five-eyes. The rest of Europe though... has no great cloud options I can think of for genuine national security stuff.

[statguy]

AWS revenue in Q3 2019 was $9B, so it would be about 4% of AWS's business in terms of revenue.

[hannibalhorn]

Ah, I remembered the $8.x B last quarter, but for some reason was thinking that was annual. Thanks for actually looking. :-)

[ranieuwe]

Set up a Datascience Virtual Machine next time. Everything prepackaged (Visual Studio, SQL, Python, Julia, lots of other packages for Datascience) and low cost and no licensing problems to deal with.

[hos234]

About 65% of all porn video streaming is on Azure media services. Robust as hell. So should be easy to support all those drone army feeds.

[iamben]

Is this true? Fascinated to read more if so.

[tpetry]

How should this work? Traffic is insanely expensive in the cloud.

[techntoke]

Or the Epstein-like blackmail video feeds

[Avalaxy]

Must really be your bubble. Here in the Netherlands pretty much every company I come across is on Azure. From small companies all the way to massive ones and governments.

[Retric]

Azure is a little under 1/2 the size of AWS in terms of revenue, and growing a little faster.

[solidasparagus]

Assuming your 1/2 number is correct (I'm doubtful), an $18B annual revenue company growing at 59% (+$10.6B) is not growing faster than a $36B annual revenue company growing at 35% (+$12.6B)

[Retric]

Company growth is almost always compared on a percentage basis as individuals don’t own the entire company making that number meaningless to them. What they care about is if they own X$ in some stock today what’s it going to be worth at some point in the future.

[solidasparagus]

I think that's a self-centered PoV (not meant as a criticism) which focuses on the wrong things when trying to understand the state of the cloud market.

What really matters long-term is who is acquiring the new-to-public-cloud customers as they move away from on-prem and who is attracting the new high-value workloads (AI). These are not growth of existing customer base which is why I think raw numbers are more useful in understanding the state of cloud market as we come to the end of the beginning of the public cloud era.

[Retric]

Revenue growth comes from both new customers and existing customers. As Assure includes many large companies like Walmart and where AWS has more startups that’s likely important. Let’s suppose Assure increases revenue from existing customers by 4% (inflation + growth) 18 * .04 = .7B and AWS increases by 8% (inflation + growth) = 36.1 * .08 = 2.9B. Which would mean 10.6 - .7 = $9.9B revenue from new customers for Assure and 12.6 - 2.9B = 9.7B revenue growth for AWS from new customers. The difference in customer bases may also be important in a downturn as Walmart is far less likely to fail than Imgur.

Granted, I chose those numbers to arbitrarily get that result. But, it also demonstrates the other reason to use percentage growth, inflation on a large customer bases implies growth where none exists.

PS: I realize they both have large and small customers, my point was not about AWS vs Assure but % vs $.

[solidasparagus]

The important revenue growth comes from new customers and new workloads. You mention inflation as if it is a meaningful driver of increased revenue, but AWS has never raised its prices for any service AFAIK. Growth is 100% driven by increased usage.

[p0rkbelly]

Azure revenue includes O365 revenue though.

[Bajeezus]

We don't know Azure's exact size, but half revenue is the best analyst estimate available. Counting O365, MS cloud revenue exceeds Amazon's

[solidasparagus]

I'm looking at their earning reports and that does not appear to be the case any more.

[p0rkbelly]

https://www.marketwatch.com/story/microsoft-earnings-trounce...

"Microsoft said that its “Intelligent Cloud” segment recorded revenue of $10.8 billion, higher than the average analyst estimate of $10.42 billion. Microsoft said that Azure grew by 59%; the company does not break out Azure revenue nor operating income specifically, as Amazon does with AWS."

I'm sure Azure is a strong business, but, if they wanted to brag about it, why wouldn't they would break out those numbers? Intelligent cloud includes Azure + 0365 + other stuff.

Google does this with GCP as well. They report Google Docs/Gmail/G Suite + GCP +other combined.

[solidasparagus]

100% agree about the bundling to hide ugly details, but it does not look like Intelligent Cloud includes O365 for the most recent earnings unless I'm reading this wrong [1]. Intelligent Cloud seems to include Azure, server licenses and enterprise services while O365 falls under Productivity and Business Processes. Quotes from earnings press release:

"Revenue in Productivity and Business Processes was $11.1 billion and increased 13% (up 15% in constant currency), with the following business highlights:

- Office Commercial products and cloud services revenue increased 13% (up 15% in constant currency) driven by Office 365 Commercial revenue growth of 25% (up 28% in constant currency)

- Office Consumer products and cloud services revenue increased 5% (up 6% in constant currency) with continued growth in Office 365 Consumer subscribers to 35.6 million"

"Revenue in Intelligent Cloud was $10.8 billion and increased 27% (up 29% in constant currency), with the following business highlights:

- Server products and cloud services revenue increased 30% (up 33% in constant currency) driven by Azure revenue growth of 59% (up 63% in constant currency)

- Enterprise Services revenue increased 7% (up 8% in constant currency)"

[1] https://www.microsoft.com/en-us/Investor/earnings/FY-2020-Q1...

[closeparen]

Basically every small and medium business in your city has Windows Server running in a closet or on a shelf somewhere doing Exchange, AD, files, and maybe SQL Server for a shrink wrapped line of business app. Every one of them is a candidate for Azure and you can bet their VAR / MSP is pushing it.