Azure Market Share: Revenue, Growth & Competition

Microsoft certainly isn’t a new player in the field of software development and SaaS, but you might not know much about their cloud computing solutions that go under the name of Microsoft Azure.  Microsoft Azure is a growing provider of cloud infrastructure and hosting services, using Microsoft’s existing connections with a variety of businesses to fuel rapid growth.

A Growing Leader in the Cloud Market

  • Through Azure, Microsoft is offering SaaS, PaaS, and IaaS services, and using existing B2B connections to fuel aggressive growth.
  • The growth of the platform means more competition between the three largest players — Google, Amazon, and Microsoft — to land key enterprise clients in the coming years.

The days when Microsoft was little more than an OS and business productivity software are long gone. With Azure’s aggressive growth, Microsoft is starting to make a big splash in the IaaS market.

Let’s dive in!

What is Microsoft Azure?

Azure is Microsoft’s cloud services platform. It offers basic cloud hosting services like virtual machines, advanced cloud services like Kubernetes engine powered deployment, machine learning, AI-powered bot services, and more.

First launched as Windows Azure in early 2010, Microsoft Azure is Microsoft’s direct answer to the growth of Amazon’s AWS and Google’s Cloud Computing platforms.

Microsoft Azure offerings.
Microsoft Azure offerings.

Having started from behind (AWS Launched in 2006, and Google Cloud in 2008) Azure has been playing catch-up, but has managed to become a worthy competitor and start winning some market share.

While Microsoft does offer regular cloud-based hosting, Azure’s main selling points are the AI platform, blockchain products, and its close collaboration with enterprise vendors like SAP.

Microsoft Azure Currently Has a 1% Market Share Within Cloud Hosting

Since Azure is a horizontal platform (with a multitude of different solutions ranging from IaaS to full-on SaaS apps), accurately calculating its market share is a challenge. 

To start out, let’s take a look at the latest W3 Tech numbers and see what market share it has in the web hosting services industry in 2020:

Web hosting market share.
Web hosting market share.

Microsoft currently holds a 1% market share within the web hosting industry.

For one of the largest tech companies in the world, this number might not sound very impressive. But you have to keep in mind that, at over $100b in 2019, web hosting is a massive pie. Even a single percentage point represents a billion-dollar business.

But of course, that’s not all the services Azure offers. 303 companies currently use Azure Blockchain Workbench, which represents a 5.07% market share of the Blockchain as a service market.

There are Over 450,000 Websites Hosted with Microsoft Azure

If you’re still hung up on the 1% number, let’s take a closer look at exactly what that means in a practical sense. 

To dive deeper, we can rely on numbers from BuiltWith, a technology lookup service that stores historical data on the hosting providers, CRMs, and other technology used by all public websites.

According to BuiltWith, over 857k live websites use Microsoft Azure’s cloud hosting services.

Microsoft Azure usage statistics.
Microsoft Azure usage statistics.

Once you dive a bit deeper and look at usage among the top sites in the world, you’ll notice Microsoft has strong enterprise connections and has used them to land the likes of Sears, Starbucks, Volvo, and Jeep as hosting clients.

Among the top 10k sites on the web, Microsoft Azure is still a notable player, coming in a clear fourth place for cloud hosting providers, after Amazon, Cloudflare, and Google Cloud.

Pie chart showing Cloud Hosting Usage Distribution in the top ten thousand sites
Hosting usage distribution for the top 10k sites.

At 6.82%, it’s a marked improvement compared to the 1.83% usage share among the top one million websites on the internet.

It’s not surprising that cloud providers are so well represented in the top 10k of sites. After all, 94% of enterprises use cloud services, with 91% of companies using the public cloud, and 72% using private cloud services:

Chart showing 94 percent of respondents using Cloud
Cloud usage breakdown in 2019.

The expenses and inconveniences of managing your own data center, like having sole responsibility for backups, setting up firewalls and all other software correctly, etc. have made traditional internal hosting mostly a thing of the past.

Microsoft Azure Revenue (Past and Present)

Microsoft instead bundles Azure into its overall cloud services report and doesn’t specify the exact percentage Azure makes up.

In 2020, Microsoft reported that its commercial cloud officially hit the $50 billion mark for its annual run rate.

That marks an impressive revenue milestone, as it’s less than 4 years ago since their fiscal run rate for cloud services was under $10 billion.

Microsoft commercial cloud revenue (Source: Statista).
Microsoft commercial cloud revenue (Source: Statista).

Since these revenue numbers include Office 365 Commercial and Dynamics 365, as well as Microsoft’s cloud properties, they don’t accurately represent the IaaS-portion of earnings from Azure.

Intelligent cloud Microsoft’s IaaS and PaaS products which includes Azure, grew its sales revenue 27% to $12.3 billion in Microsoft’s Q3 2020.

Even through this opaque veil, it’s clear to see that Azure is still lagging behind its main competitor AWS, which registered over $35 billion in revenue in 2019.

Will Azure Keep Growing at a Fast Pace?

Microsoft’s entire commercial cloud and Azure, in particular, has reported some staggering growth numbers over the past quarters.

According to Microsoft’s official earnings reports, these are the official Azure revenue growth numbers for the past 10 quarters:

  • Q2 2018: +98%
  • Q3 2018: +93%
  • Q4 2018: +89%
  • Q1 2019: +76%
  • Q2 2019: +76%
  • Q3 2019: +73%
  • Q4 2019: +64%
  • Q1 2020: +59%
  • Q2 2020: +62%
  • Q3 2020: +59%

The only Microsoft property that came close to the same growth rate in 2020 was the Microsoft Dynamics CRM at 42%.

And that’s not the only reason why the future is looking bright for Azure:

Since so many companies have an existing relationship with Microsoft through their OS or productivity software, they have the perfect platform to keep landing significant enterprise deals in the future.

Not to mention, enterprises used an average of 1,295 different cloud services in 2019, an increase of 3.9% from the previous year.

That means there’s still room for Azure and other competitors to sell cloud services beyond basic web hosting and using that as a foundation for maintaining high growth rates.

Finally, let’s take a look at what the search engine trends look like.

Microsoft Azure search trends (Source: Google Trends).
Microsoft Azure search trends (Source: Google Trends).

The Google search trends for Azure also seem to be on an upward trend, although losing some of the momentum from the 2015-16 period.

Is Microsoft Azure Secure?

To properly answer the question about whether or not Microsoft Azure is secure, we have to first examine the foundation. Are public cloud solutions in general considered to be secure?

Public opinion on public cloud hosting and computing services among IT professionals is not great.

Cloud vs on-premise security survey (Source: Alert Logic).
Cloud vs on-premise security survey (Source: Alert Logic).

About 49% of IT workers think a public cloud system involves a higher risk of security breaches.

The good news is that real cybersecurity professionals have a completely different outlook.

A report by Gartner experts estimates that by the end of 2020, there will be 60% fewer security incidents as a result of moving away from traditional data centers to IaaS solutions.

Microsoft Azure security investment.
Microsoft Azure security investment.

Microsoft is no slouch when it comes to the security of its cloud services. With a team of over 3,500 cybersecurity professionals and a yearly research budget of over $1 billion, it’s hard to point fingers.

Over 6.5 trillion threat signals are analyzed every single day and Microsoft pays up to $300,000 in bug bounty payouts for potential exploits discovered in Microsoft Azure.

That’s a real dedication to providing a reliable, secure service to their clients.

Microsoft Azure vs. Google Cloud

In a Google Cloud vs Microsoft Azure comparison, there’s an important thing to consider.

Not only did Google Cloud have a 2-year lead on Azure, but Google was essentially founded on the back of a robust network of cloud services.

This shows when you look at the average downtime numbers between the platforms.

Average downtime by cloud platform (Source: NetworkWorld).
Average downtime by cloud platform (Source: NetworkWorld).

From the start of 2018 to May 2019, Google Cloud only reported 361 hours of downtime (across all services), vs Azure’s 1,934. That’s a major advantage for GCP.

When you examine the latest usage trends for web hosting providers, you will see that Google Cloud also has a significantly larger market share, with 3.7% in April 2020, vs Azure’s 1%.

Historical usage statistics trends (Source: W3techs).
Historical usage statistics trends (Source: W3techs).

That means Google Cloud has over 3x the market share in web hosting that Azure does.

In addition to this, Google Cloud also has a significantly higher usage share among the top 10k sites on the web, with 17% vs Microsoft Azure’s 7% according to BuiltWith.

Hosting usage distribution for the top 10k sites.

One interesting development for Microsoft is that according to Gartner’s most recent Magic Quadrant, Azure is leading both in terms of completeness and innovation.

2019 Magic Quadrant for Cloud Infrastructure as a Service (Source: Gartner)
2019 Magic Quadrant for Cloud Infrastructure as a Service (Source: Gartner)

This likely refers to their entire cloud offering, including Microsoft Dynamics and other products, rather than just Azure.

In terms of revenue, it’s hard to make a comparison because of Microsoft’s lack of transparency, but Google Cloud Platform hit its goal of $10 billion in annual run-rate earlier this year. 

Microsoft’s intelligent cloud services did $12.3 billion in Q3 2020 alone, but it’s unclear to what extent this represents revenue from Azure.

Microsoft Azure vs. Amazon Web Services (AWS)

Now, let’s see how Microsoft Azure stacks up against the biggest player in IaaS: Amazon Web Services (AWS).

Amazon has a greater piece of the cloud market share, even if you factor in non-Azure Microsoft products.

Worldwide IaaS and PaaS vendor market share 2019 (Source: Statista).
Worldwide IaaS and PaaS vendor market share 2019 (Source: Statista).

If you take a combined look at both Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) revenue of cloud vendors, Amazon had a 27.9% market share in 2019.

You see the same picture when you look at the web hosting side of things as well. In April 2020, AWS maintained a 5.8% market share, the second-largest hosting provider in the world, while Azure only has 1%.

When you look at the BuiltWith data, you clearly see the same trend in the usage distribution between AWS and Azure in the top 1 million sites in the world.

Pie chart showing Cloud Hosting Usage Distribution in the 1 million sites
Host distribution for top 1 million sites (source:

At 25%, Amazon is the second-largest cloud hosting provider among the world’s top websites. So advantage AWS here.

AWS used its early lead to establish a leading market share in most IaaS categories, and Azure is slowly playing catch up.

That about sums it up for the market share comparison.

Were you reading about Azure’s market share to prepare for a transition? Do you, like many of the top websites in the world, also want to move your website to the cloud?

Read on to find out how you can move your site, app or database, hassle-free, to the cloud with Kinsta.

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