First time for everything! Word is getting around of a negative growth trend in AWS, and what could be the first ever downtick for the leading cloud provider in the world.
This, due to some intense competition from immediate rival, Azure.
Technology news headlines over the past few months have attempted to hint at this, as the battle rages between Amazon Web Services and Microsoft Azure. Many forecast that the latter is set to catch up to AWS sometimes this year.
And the latest such estimate has Brent Bracelin, senior research analyst at Pacific Crest, writing:
“We estimate that in the second half of this year, Microsoft’s Commercial Cloud segment could surpass Amazon Web Services in absolute revenue, becoming the largest public cloud platform for the first time in 10 years and firmly marking its transition from cloud laggard to cloud leader.”
This was followed by Deutsche Bank sounding a cautious little note towards AWS by moving its price target down from $1,150 to $1,135.
And though they still remain generally bullish towards the company, the criticism came from what was called the first ever downtick from partners around the pace of large European cloud migrations. Signs that the Amazon cloud platform is finally facing significant headwinds in terms of competition.
Amazon is on track to disclose its most recent financial result this week, just as Microsoft posted theirs last week that showed overall revenues of $23.3 billion on the back of notable cloud gains.
The software giant is also readying its impressive new Azure Stack solution that looks set to have a bit of an impact on how organizations see the public cloud.
All that said, AWS still holds significant lead over Microsoft when it comes to Infrastructure as a Service, where it absolutely dominates the market. Amazon enjoys more than double the market share in public IaaS of the nearest three challengers combined — Microsoft, Google and IBM.
Amazon Web Services also holds the lion’s share in the PaaS market, or Platform as a Service, though here the market share of Salesforce, Microsoft and IBM combines to amount to slightly more than the AWS total.
Point being, these are not apples to apples comparisons, particularly considering the fact that Microsoft does not clearly break out their cloud segment revenues and operating income, unlike Amazon.
Nevertheless, these forthcoming quarterly results will post a clearer picture of where AWS is heading.