AWS falls out of favor, Microsoft Azure takes over

According to foreign media reports, a Goldman Sachs survey of technology executives from large companies last month showed that although Amazon's revenue is ahead of the market overall, Microsoft Azure is still the most popular public cloud computing service.

The latest survey results suggest that Microsoft may continue to gain more market share in cloud computing services. Microsoft's stock price has outperformed the major indexes as CEO Satya Nadella has focused the company more on cloud computing services, especially for business use. Further growth in cloud computing services, as analysts expect, could help drive the stock higher.

Goldman Sachs' latest findings are based on its information technology spending survey of 100 IT executives at Global 2000 companies, which the firm conducts every June and December.

The latest survey shows that 56 executives are using Azure for cloud computing infrastructure, while only 48 executives are using AWS. Analysts say that across cloud infrastructure and platform as a service combined, Microsoft's lead has been widening since December 2017.

In addition, the analysts wrote that more respondents expect their companies to use Azure than any other cloud computing service in three years. The survey showed that 66 CIOs responded that they would use Azure for cloud computing infrastructure by then, while 64 CIOs said they would use AWS by then.

“Respondents expect that three years from now, today’s top cloud computing service providers will continue to dominate the rankings, with Microsoft remaining the clear leader,” the analysts noted.

The results led the analysts to conclude that about 23% of IT workloads are now on public cloud computing services, up from 19% in June, and they expect that proportion to reach 43% in three years. This leaves a lot of room for growth for other competitors, such as Google. Google Cloud Platform ranked third among the cloud computing infrastructure vendors that respondents expect to use in three years.

Analysts have repeatedly stressed that workload usage doesn't align exactly with actual revenue. In the third quarter of 2019, AWS brought in $9 billion in revenue. Microsoft doesn't specify Azure's quarterly revenue, but Griffin Securities analyst Jay Vleeschhouwer, who has a "buy" rating on Microsoft's stock, estimates Azure revenue for the quarter was about $4.33 billion.

About 91% of analysts surveyed by FactSet have a rating equivalent to "buy" on Microsoft stock, including Goldman Sachs.