Microsoft Wallops Amazon in 2020 Cloud Revenue | Hacker News Reader

Microsoft Wallops Amazon in 2020 Cloud Revenue

cloudwars.co

27 pointssamanator50 comments

FYI the author of the article runs a PR firm and is known for publishing PR pieces masquerading as journalism, e.g. https://www.brightworkresearch.com/how-accurate-was-forbes-o...

that particular article is a critique of the same author doing a similar spin job for IBM's cloud.

one thing noted in that article (and has been noted elsewhere) is that microsoft lumps things like Office365 in their "cloud revenue" which would greatly mask the size of Azure vs. AWS

Wow, thanks. How did you find that?

article content seemed suspect so i googled the guy's name a bit

I think Microsoft also adds their Office 365 subscription revenue in their cloud revenue and AWS doesn't. So it's not apples to apples comparison imo.

That's kinda the point. AWS can't count their Office 365 subscriptions, because it doesn't have any. It's a question of where on draws lines. Neither is an apples-to-apples comparison.

Microsoft's moat play is to integrate with Office, Teams, github, and similar. If Azure integrates into my business processes, that's huge. And if github has a pipeline straight into cloud deployment with one click, that's huge too.

AWS' moat play might be to integrate with business logistics. Amazon has business services like fulfillment which could be part of AWS. It's a deeper moat, but not as wide. No one can compete with Amazon here without dropping billions, but many businesses don't need those services (mine doesn't).

Google Workspace has a better UX than Office 365, but is not at all enterprise-ready, and is barely b2b-ready. That doesn't look likely to change soon. Google might be able to build up some kind of moat around advertising integration, in both directions, but it seems harder.

For branding, right now:

* AWS > Microsoft > Google among developers.

* Microsoft > AWS > Google among non-tech businesses.

I'm just speculating here but let's say Stadia becomes a big cloud gaming business for Google then that gives the velocity to Google Cloud biz similar to how Office 365 has done it for Microsoft in the cloud space. Google workspace alone can't compete with Microsoft in cloud revenue so Google needs something else in front end service on top of its cloud infra to compete with Amazon and Microsoft.

Microsoft also has existing business relationships with practically every business that uses computers on the planet. They are the king of enterprise.

And 365 includes Office. So this is basically the revenue from Office, which was already a huge business long before cloud was a thing.

And they do aggressive bundling to tie it together.. Basically the same monopolistic practices which got them in trouble back in the 90s.

so were many other products before they become a PaaS.

AWS has WorkMail and a bunch of other services having to do with office workers (virtualized windows instances and such I reckon?), but I doubt they're anywhere as big as Office's offering.

People use WorkMail?

For some reason, I do.

How ridiculous.

I've never heard of cloudwars.co before this post. I will henceforth assume that they are unreliable clickbait and possibly in the tank for Microsoft.

If Google includes G-Suite (does it? I don't know!) then MS including Office 365 is fair.

Yeah that and if Google should include Android ("App distribution as a Service") and YouTube ("Video as a Service") then they'd probably cover a lot of the gap on both Amazon and Microsoft.

I also wonder if AWS accounts for revenue from Amazon, the retailer and the digital services provider? If so, Alphabet's "use" of GCP to power search and ads must make them the largest GCP customer and help their revenue numbers significantly. I guess, Alphabet's waiting for the most opportune time to merge those numbers in their reports to blow AWS out of the water, just for PR purposes.

Besides, I think AWS missed a trick by passing on GitHub (and instead relying on CodeDeploy/CodeCommit and half-baked other horrendous, me-too offerings). I mean, they have acquired developer tools companies before (like Cloud9 IDE). May be they'd do well to all-in for new-age dev-tools companies like repl.it and retool.com now that they don't have a run away success in a GitHub-like product which really is at the center of the software development world right now.

It's not about "fair", it's about whether the products are comparable. Amazon simply doesn't offer online document software a-la Office or G-Suite. (Likewise Microsoft and Google don't offer equivalents to some of esoterica you can find in the AWS menagerie). If you want to do an analysis about who is beating who, you need to compare competing products.

https://aws.amazon.com/workdocs

You're right, I forgot that existed. Which is sort of the point: Office 365 is annihilating WorkDocs in the market, and that's important to note if you're doing a competetive analysis of the online office productivity market.

But that fact isn't really relevant to a discussion about whether AWS or Azure is capturing more of the cloud hosting market, which is what the headline implies.

Wow, never heard of it - and will it be around in 10+ years time? Has it reached critical-mass to ensure continuity and availability?

+1. Even if it did, in one case (aws), the product’s success is entirely dependent on success of other companies (for better or worse) and the multiples/margins are also different.

Also Dynamics which is their CRM/ERP platform. Not sure how big a factor that is, but it's at least a decent chunk of revenue.

Basically, the title of this post and its premise is just very wrong. Microsoft includes Office 365, LinkedIn and probably GitHub in its "cloud" revenue. AWS "cloud" revenue is not remotely comparable.

> MSFT: "Our commercial cloud revenue, which includes Office 365 Commercial, Azure, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $16.7 billion and $31.9 billion for the three and six months ended December 31, 2020, respectively, and $12.5 billion and $24.1 billion for the three and six months ended December 31, 2019, respectively. These amounts are primarily included in Office products and cloud services, Server products and cloud services, and LinkedIn in the table above." https://www.sec.gov/ix?doc=/Archives/edgar/data/789019/00015...

Why do you say that? AWS includes their work productivity offerings in their bottom line. Why can't Microsoft?

I don't understand why people have so many issues with Microsoft including Office 365 subscriptions in their Cloud revenue. If you have tried managing a tenant you would know that Office 365 subscriptions work pretty much like any other SaaS offering. They just happen to have desktop clients that are better than their online counterparts.

haha, the old IBM vs Oracle trick - renewal customers sign contracts that say "cloud" and then count this as "cloud" revenue.

On slide 5 of Microsoft’s Q4 earnings presentation, the company says, “Commercial cloud includes Office 365

Includes Office 365..

Its about messaging and existing channels. Microsoft has a rich ecosystem of VARs and System Integrators and they are effectively leveraging these channels to reach the CIO and IT executives.

AWS relies on word of mouth - in organizations where developers and architechts have a say in infrastrucurue -- its always AWS. Sadly , for AWS, only executives have this power in large companies and they will always choose Microsoft.

Clickbaity title, it should read more along lines of „Microsoft Office 365 is bigger than AWS”

Something is off here. This can’t be cloud computing like we think when we think AWS.

From the article:

"I suspect that many still inaccurately equate or conflate “cloud” with “IaaS,” which is a perspective at least a full decade out of date. Without question, Amazon created and still leads the IaaS segment of the cloud—but the cloud of today looks nothing at all like it did 10 years ago when “cloud = IaaS” was a reasonable equation."

The "Cloud Revenue" number includes things like Dynamics, 365, etc.

If you're comparing Microsoft with Amazon on "cloud" revenue than yes, I'm going to assume you're discussing IaaS.

Otherwise it's like saying "McDonalds wallops GEICO in burger revenue."

I think that's a bit of a red-herring.

I feel that increasingly the real difference is between 'end-user facing cloud products' (which essentially always means SaaS) and 'developer-facing cloud products' (which includes all your IaaS/PaaS/some-SaaS).

Historically, the term for 'end-user facing cloud SaaS product' was 'a website'; we're just seeing tighter IAM integration in the enterprise space and more powerful products as a result of the increased capabilities of JS engines and better frameworks.

The difference is basically "this is stuff developers used to build products" vs "this replaces a shrink-wrap product that would historically have been delivered to a user desktop".

I don't like the tone of that quote - IaaS barely existed a decade ago in its current form; "cloud" back then was SaaS, PaaS and maybe some VM hosting.

Cloud has never been "just" S,P, or I "aaS". But it seems clear to me if you're going to write an article comparing any company's so-called Cloud revenue to Amazon, you're going to be comparing IaaS numbers.

Apples and Oranges --- a good portion of MS cloud revenue is from hosting MS apps which AWS doesn't really compete in.

Whether these companies account for their own use of infrastructure as cloud might be the difference. Do these companies consider all of their own products running on their infrastructure as cloud and therefore consider expenses for those as cloud revenue (and cloud expenses)? Or their kind of separate products like Github, Waymo, etc.

Amazon's non-cloud products probably use much much less data center infrastructure than Microsoft and especially Google.

These numbers are completely different then other numbers I've seen

https://www.microsoft.com/en-us/Investor/earnings/FY-2020-Q3...

Microsoft says 13.0 billion, this says 15.3 billion

I have no idea where these numbers are from.

Microsoft's fiscal year does not line up with the calendar year. Their FY Q3 maps to calendar Q1. Since the article is comparing companies, it's appropriate to use the calendar year.

Office 365 is huge. Amazon's offering (AWS WorkMail/WorkDocs/etc) doesn't come close.

The thing is, cloud is more than just ordinary IaaS these days. Although AWS obviously wants the "cloud" to still be seen primarily as an IaaS thing.

This definition of cloud is meaningless though - anything that sends a packet via the internet can now be classified as "cloud". This is cearly a marketing ploy to appeal to less-than-savvy enterprise customers.

I do not think anyone has said that Microsoft's way of defining what the cloud is is more accurate...

What I am trying to say is that the criticism that you are "not allowed" to include PaaS and SaaS solutions to the cloud revenue doesn't seem correct either.

I understand why someone like AWS would not want that to be the new way of counting. It is profitable to appear as the unthreatened champion of cloud (the default choice), but the fact is that Microsoft is closer in size than what many people may think.

this whole thing is kind of a fun accounting game. If Google used google cloud for its own internal services (adsense, gmail, etc), and billed the different teams, everyone would be talking about the newest cloud leader.

This website is crap btw guy came from Oracle so it's understandable.

So when is Amazon going to create their own office suite?

They already have it.

https://aws.amazon.com/workdocs

https://aws.amazon.com/workmail

https://aws.amazon.com/workspaces

When opensource version of cloud docs/sheets available. Then we will see AWS: X as a Service.

I don't think AWS tries to create any non trivial software.

Take open source software, slap AWS brand on it, and sell it through the ecosystem it has successfully created.

RDS, Document DB, Elastic, EMR and other countless services comes to mind.

Couldn't they do libreoffice as a service? Doesn't that already exist?

I doubt any one want to create an office suite, the last people who tried to do this was Salesforce (with quip buy) and it's now a niche product. No one has an integrated product like Office 365.

How is Apples iwork doing these days?

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