Microsoft Outgrows the Cloud Competition

As security continues to improve and enterprises increasingly move from on-premise data centers and infrastructure to the cloud, (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are positioned to soak up the largest shares of the unfolding market.

A report from IDC estimates that public cloud spending will increase from $70 billion in 2015 to $140.1 billion in 2019  that’s a lot of potential business up for grabs for service providers.

Amazon currently has a big lead in the space thanks to its multi-year head start, but Microsoft’s Azure offers comparable service and is growing at a faster pace. Can Microsoft continue to make gains and ultimately catch the big leader?

Mapping the progression of cloud market share remains difficult, because the market will be shaped by new app offerings and integration with emerging technologies such as the Internet of Things, as well as to what extent the enterprise market breaks for hybrid versus pure solutions. However, it appears that Microsoft and other challengers will have a hard time wrestling market leadership away from Amazon.

Microsoft still has substantial opportunity with Azure, even if it never wrestsIaaS leadership from Amazon. Its cloud infrastructure should become a meaningful contributor to the company’s bottom line within the next several years, though propelling cloud-growth will continue to eat into profitability as it directs business from higher margin on-premise enterprise businesses and bundles the sales of other services with Azure.

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