Microsoft's Azure gets competitive with $1B in revenue

A jump in subscriptions to the software giant's cloud computing software reveals that the company may be starting to edge into Amazon's territory.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read

While Amazon is still king in the cloud computing world, it appears that Microsoft's Azure software is on the up and up. Not only have Azure subscriptions risen 48 percent over the past six months, but Azure and related Microsoft cloud service software earned $1 billion in revenue over the past year for the first time ever, according to Bloomberg.

Making the "billion-dollar club" is pretty significant -- considering the slumping PC market. Microsoft revealed these new performance details to Bloomberg in an interview on Monday.

Twenty percent of companies use Azure, while 71 percent go to Amazon for their cloud needs, according to Bloomberg. However, Forrester Research analyst James Staten told the news source that it's possible that Microsoft's market share could grow to 35 percent within the next year.

"I expect them to double annually from here," Staten said speaking about Azure revenue. "Microsoft probably has more net new growth opportunity sitting in front of them than probably anyone in the market."

Microsoft has been making a push to boost Azure's presence over the past year. The company announced earlier this month that its Linux and Windows Server virtual machines on Windows Azure were available and ready for deployment. These give users a way to run existing Linux and Windows Server apps in the Azure cloud without having to completely rewrite them.

On the pricing front, Microsoft also made an official commitment to match Amazon Web Services on price for all "commodity" services, including compute, storage, and bandwidth. As part of this pledge, Microsoft reduced its general-availability pricing on virtual machines and cloud services by between 21 percent and 33 percent. Microsoft's new pricing will go into effect on June 1.

One week prior to Microsoft's announcement, Amazon debuted its latest round of price cuts on a number of its Amazon Web Services. According to our sister site ZDNet, Microsoft and Amazon have been locked in a price-cut battle in the cloud for months.