Because of Microsoft's enormous 154% year-over-year growth in the first quarter of the current fiscal year, they are now officially the second-largest cloud service provider. Amazon is still number one. They've left behind Google, IBM, and Salesforce. Their cloud infrastructure grew more than double compared to Amazon Web Services which was around 67%. IBM's cloud services are also catching up the pace with 80% growth beating Google's 60% and Salesforce's 37% mark. Microsoft's IaaS, PaaS, and it's hybrid cloud services, along-with their excellent marketing and branding got them to the point where they are right now.
Here's a graph by Synergy Research Group that shows cloud infrastructure services, market share and revenue growth for the first quarter of the current fiscal year. Services like Iaas, PaaS, private and hybrid cloud are combined.
“Microsoft’s cloud growth really is impressive” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “A combination of marketing muscle and credibility with the target audience is helping it to make great strides. Nonetheless, Amazon’s revenues are still more than three times those of Microsoft and it will remain in a league of its own for the foreseeable future.”
Microsoft reduced computing prices by 27%-35% and storage by 44%-65% along-with Windows instances by 27% and memory-intensive Linux instances by 35%. With these price cuts, Microsoft is now in a position to likely challenge Amazon Web Services in cloud business but not soon enough. AWS's (Amazon Web Services) cloud is much bigger compared to Microsoft's, about 1/3rd more. But keeping in mind Microsoft's progress, they can reach there in about four to five years.