Microsoft ate into AWS's market share in Q4

 Satyanarayana Nadella

AWS has lost some of its market share to cloud rival Microsoft, with the former company's share reducing from 68% to 62%.

Meanwhile, Microsoft gained four percent of the market share, increasing from 16% to 20%, with Google making up the remaining two percent of AWS's previous portion of the pie, according to research firm KeyBanc analysts.

In monetary terms, Microsoft's increase in market share amounted to around $3.7 billion of its total 2017 revenues, KeyBanc analysts told CNBC. If these numbers are correct, it means the revenues coming from Microsoft's cloud services doubled year-on-year - a pretty significant amount, even for a company the size of Microsoft.

The next stage in Microsoft's cloud development will be a firmer presence in the AI space, although its focus will remain on growing the company's cloud infrastructure.

"After our conversations with leaders at Microsoft, we came away believing the majority of revenue will come from the surrounding infrastructure costs, rather than the monetization of specific AI services, due to the required intensive model training and ongoing inference," the analysts noted.

KeyBanc's analysts think Azure's revenue growth will start slowing in 2018 after its swift increase, to 88%, despite the company's AI models being the most established out of the three leading cloud providers.

It's not all doom and gloom though as AWS grew 42% in the third quarter of 2017, meaning it can probably maintain its lead for some time.

Clare Hopping
Freelance writer

Clare is the founder of Blue Cactus Digital, a digital marketing company that helps ethical and sustainability-focused businesses grow their customer base.

Prior to becoming a marketer, Clare was a journalist, working at a range of mobile device-focused outlets including Know Your Mobile before moving into freelance life.

As a freelance writer, she drew on her expertise in mobility to write features and guides for ITPro, as well as regularly writing news stories on a wide range of topics.