According to a new report issued by KeyBanc, Microsoft strengthened its position in the cloud computing market during Q4, 2017, while Amazon saw its market share shrink.
A year ago, Amazon Web Services still enjoyed a 68% market share, but the latest data showed that this has now dropped to 62%. The KeyBank analysts also pointed out that Microsoft’s share of this market increased from 16% to 20% during the same period, while Google managed to push up its own market share from 10% to 12%.
The KeyBanc report says that it was likely that Azure sales contributed around $3.7bn of Microsoft’s revenue of $96.6 billion in 2017. If correct that would mean Azure revenue nearly doubled, according to the company’s official figures about Azure revenue during recent quarters.
Amazon claims that Amazon Web Services grew by 42% during Q3.
The analysts project that Azure will still grow sharply this year, but at a slightly reduced rate of 88%.
The study also makes a comparison of the artificial intelligence tools produced by the top three players in the field of cloud computing and concludes that Microsoft has more pre-built models than other public cloud vendors. The researchers say that the company also makes them available from a higher number of international data centres than the other two.
Quoting Azure’s growing revenue and increasing market share as well as Microsoft’s ventures into the world of AI, the experts increased the company’s one-year stock price target from $94 to $106. The company’s share price closed at $89.60 on Friday afternoon.
The analysts concluded by saying: "After our conversations with leaders at Microsoft, we came away believing the majority of revenue will come from the surrounding infrastructure costs, rather than the monetization of specific AI services, due to the required intensive model training and ongoing inference."