Amazon(s amzn) Web Services remains the biggest of the big cloud providers, but it’s seeing competitors gaining in its rear-view mirror. Nomura Securities analyst Rick Sherlund now expects Microsoft(s msft) to field the largest cloud business by December — at least in terms of annual revenue run rate which he estimated will be $5.77 billion.
In a research note, Sherlund, who has covered Microsoft on and off for years, said that revenue estimate would represent 89 percent year-over-year growth for that business. In terms of run rate, he ranked Salesforce.com(s crm) as the second largest provider at $5.5 billion and 28 percent growth year over year.
This is a tricky calculation for a few reasons, not least because AWS, the world’s largest cloud infrastructure provider, does not break out its numbers. Actually, none of the cloud providers make it easy to assess the size of their businesses. Microsoft, for example, seems to lump Azure, Office 365 Software-as-a-Service (SaaS) business all together. Still, given that rather large caveat, Sherlund estimates that Amazon’s cloud business run rate would be comparable to Salesforce.com’s.
Another wrinkle is that this is not an apples-to-apples comparison. Salesforce.com’s business is mostly SaaS with some Platform as a Service (PaaS) sales from Force.com and Heroku. AWS, on the other hand, is typically defined as Infrastructure as a Service (IaaS). Microsoft Azure started out four years ago as a PaaS but last year added AWS-like IaaS capabilities.
Purists prefer to break out all those categories separately, but for non techies those roles are muddled. For example, Synergy Research Group’s recent figures which combine IaaS, PaaS and SaaS into one big blob, show Microsoft and IBM growth rates in the second quarter of 2014 (164 percent and 86 percent respectively) outstripping AWS growth (49 percent), Google (47 percent) and Salesforce.com (38 percent).
For context, note that AWS remains the largest cloud provider per Synergy, but it is no longer bigger than all four of its nearest competitors combined (see chart.)
For Amazon’s recent second quarter, net sales for the category including AWS grew 38 percent year over year, to $844 million but were off 3 percent sequentially. And the growth rate declined from 60 percent for the previous quarter.
AWS remains the go-to cloud for many, many shops, but as Gigaom has reported, it’s seeing increased competition in price from Microsoft and Google on the public cloud front. The company has several years’ head start on competitors who do not yet rival the breadth of services Amazon offers, the latest being new domain registration services in its Route 53 Domain Name Service (DNS) and enhancements to its Trusted Advisor service.
But pretty much everyone can agree that when it comes to cloud providers, this is now a horse race. Here’s our look at who could take on AWS circa 2012.
This story was updated at 8:40 a.m. PST to reflect that Microsoft’s cloud business includes more than Azure and that none of the cloud providers make it easy to figure out how big their cloud business actually is.