"The aircraft are becoming smarter and smarter and the operators are all looking to gain more operational insights into what's happening on the aircraft," says Greg Jones, Microsoft’s global industry director for travel. "This is a true opportunity to look at what transformation can occur within the aviation space."
Several smaller organizations, from native cloud companies such as Box to the nearly 200-year-old publisher Houghton Mifflin Harcourt are using Azure. Yet if Microsoft is going to challenge AWS it needs more marquee enterprise customers like Boeing and General Electric, which earlier this month said that its Predix IoT platform would run on Azure.
Yet Microsoft faces a big challenge in a cloud market where exclusive deals remain hard to come by. AWS enjoys commercial relationships with Box, GE and Boeing.
In AWS, Microsoft faces stiff test
Ed Anderson, a Gartner analyst who tracks the cloud computing market, says Microsoft’s recent enterprise wins underscores how traditional businesses such as GE and Boeing are adopting progressive computing approaches, including cloud, IoT and machine intelligence. “The fact that Boeing announced this with Microsoft rather than with AWS shows some traction that Microsoft is gaining,” says Anderson. “It’s very important for Microsoft to win deals like this.”
AWS played a major role in driving Amazon.com's profitable second quarter Thursday, reporting revenue of $2.87 billion, up 58 percent from the same period in 2015 and the most it ever delivered in one quarter. If AWS keeps up the pace, it will easily exceed the $10 billion run rate CEO Jeff Bezos foreshadowed for 2016. And there's no signs of slippage: Salesforce.com selected AWS as its preferred public cloud infrastructure provider and Kellogg’s, Brooks Brothers, Ferrara Candy Company are all running critical SAP business applications on AWS.
Microsoft’s cloud business is on a bit of a tear itself. The company said earlier this month that its fourth-quarter revenue from Azure grew 102 percent, while Azure compute usage doubled year-over-year. Its Intelligent Cloud, which includes server Windows Server and Azure, grew 7 percent to $6.7 billion. More broadly, Microsoft’s commercial cloud business, which includes Azure, as well as Office 365 and Dynamics CRM, achieved a $12 billion run rate, up from $10 billion in its previous quarter.
However, Microsoft’s accounting practices – it declines to disclose revenues for Azure alone -- make apples-to-apples comparisons between Azure and AWS impossible. Anderson says that while Microsoft’s enterprise reach goes deep, particularly with businesses that use .NET applications and that have inked enterprise agreements, AWS enjoys the pole position in the public cloud market. As such,Anderson says, Microsoft “must go the extra mile to attract some of these big deals.”
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