Microsoft, AI, and The Cloud

I wanted to write a small addendum to supplement my recent report on Microsoft. (link) I had a member reach out with a few questions regarding the business segments as a percent of revenue going forward. Here’s what he sent:

I see Microsoft and other big names shift % of revenues over to cloud services. Why? Because I see a shift in decentralization. It’s difficult to explain, but as more and more people and businesses shift workloads to the cloud and remote servers, they become more deceltralized while Microsoft becomes more centralized. It’s not rocket science, but it does point to the fact that people are becoming decentralized. At any given point, we access the internet to:

• Text
• Store photos
• Send email
• Engage websites/apps/social media
• Pull information
• Run programs/formulas
• Save files
• Play games

And this is just on the personal side. Businesses are doing the same thing.

Some notes and stats from AAG-IT.com
¹
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1. 12-month revenues between the start of 2021 and 2022 for cloud infrastructure services reached $191 billion.

2. AWS had the largest market share of cloud infrastructure services at 33% in Q1 2022.

3. Microsoft Azure had a market share of 22% in Q1 2022, with Google at 10% and all other companies at 35%.

4. In total, Amazon, Microsoft and Google accounted for 66% of the cloud market at the start of 2023.

5. Public cloud Platform-as-a-Service (PaaS) revenue in 2022 was $111 billion.

6. The cloud market is projected to be worth $376.36 billion by 2029.

7. It’s estimated that the world will store 200 zettabytes (2 billion terabytes) in the cloud by 2025.

8. The average cloud user spends around $400 monthly for a single server. Hosting the entire back-office infrastructure costs an average of $15,000 per month.

9. Just 11% of organisations have encrypted between 81-100% of the sensitive data they store in the cloud.

With points 2 and 3 above, I expect Azure and the MSFT team to slowly overcome Google and Amazon services over time. That is the key metric I’ll be watching in the next few years. I expect Azure to be the dominant cloud service provider by 2030.

More from AAG-IT:

Microsoft Azure catches up with Amazon Web Services

AWS remains the most popular cloud service, with a 33% market share at the start of 2022. However, Azure is seeing increased usage compared to previous years. Microsoft’s cloud platform gained a 2% market share in 2022 from 2021, with revenue up 24%.

A 2022 study indicated that organisations that are ‘light’ or ‘moderate’ cloud users are more likely to use Azure over AWS. For light users, 66% used Azure, compared to 65% AWS. For moderate users, 70% used Azure, 2% more than those using AWS (68%).

However, for those organisations that see themselves as ‘heavy’ cloud users, AWS is still the preferred choice, albeit by a small margin. 81% use Amazon’s cloud platform for their workloads, compared with 80% for Azure.

These shifts in market share are so small. We will see if the rate of shift increases over time.

If you have any questions comment below or email me.

Further Reading

1. The Latest Cloud Computing Statistics – AAG-IT.com – A great collection of relevant stats on the big players in the cloud space.¹