CIOs: Microsoft Azure to Outpace Amazon Web Services as Cloud Market Soars

Amazon is currently the biggest cloud service vendor with revenue of nearly $8 billion, but many expect Microsoft Azure to outpace its rival as demand for cloud service soars.

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Growing demand for cloud service is posing a serious threat to on-premise IT infrastructure vendors, and CIOs are favoring Microsoft’s Azure over Amazon Web Services (AWS), according to a survey of the CIOs by JP Morgan Chase.

Chief information officers (CIOs) that took part in the survey predicted that the public cloud would claim more than 40% of enterprise workload, up from the current 16.2%, over the next five years.

The authors of the report conclude that this “monumental architectural shift” to public cloud “shows no signs of abating and is likely to create a major ripple effect across the entire technology landscape.” The findings are based on a survey of 207 CIOs with an average annual IT budget per firm of $600 million, together representing some $126 billion in enterprise IT spending every year.

Amazon is the biggest cloud service vendor with revenue of nearly $8 billion. But the new report expects Microsoft to outpace Amazon as the demand for cloud service soars in the corporate world.

Some respondents have, however, praised AWS, saying that Amazon’s platform has “a transformative” power and a lot of IT assets will be migrated to AWS over the next 12 months.

Microsoft and Amazon are early entrants into the cloud market. It seems large firms favor Microsoft’s Azure while smaller firms have continued to find more benefits in AWS.

Despite their size, IT budgets at these firms are set to grow this year by only 2.8%, compared to more typical annual growth rates of 3% to 4%, the report said. At the largest firms — those with annual IT budgets of more than $2 billion — spending is expected to growth by less than 1%.

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And as more businesses shift key operations to the cloud  to cut cost, AWS is knocking once-dominant providers of legacy enterprise systems and services down a ranking of big IT vendors that CIOs at large corporations consider “most critical and indispensable” to their organization’s technology environment, the report said.

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