How much money does Microsoft make on Azure?

Insider got a look at Microsoft’s internal document around its Azure business and its size.  The company publicly groups all cloud as “intelligent cloud,” and it includes other things like Windows Server and consulting services.  They do publicly report the growth rate for Azure, however.  That Intelligent Cloud unit booked $75.2 billion in Microsoft’s previous fiscal year.

The internal presentation viewed by Insider gives some insight. Quoting the piece.

A chart in the presentation, labeled “MSUS Ent Azure Mix and Growth,” lists the following figures for “ACR,” or Azure consumed revenue — the actual value of Azure services consumed by a customer, whether they paid the full retail rate or a discounted rate:

• $15.9 billion in its current fiscal year, 2023 (likely projected).
• $10.9 billion in fiscal year 2022.
• $7.2 billion in fiscal year 2021.
• $4.7 billion in fiscal year 2020.
• $2.9 billion in fiscal year 2019.

It’s unclear what is meant by “MSUS Ent,” but MSUS is what Microsoft internally calls its US subsidiary, responsible for sales and support for the company’s more than 11,000 public and private customers in the country. MSUS has a unit called Enterprise Commercial.

If you’re interested in knowing how hazy all the providers are in their insight, the Information breaks it down.     The short answer – Microsoft is the hardest to track, but Amazon and Google are still pretty opaque.  

In August, Microsoft and Amazon pledged to control costs for cloud customers during quarterly earnings calls.  From that coverage in CIO Dive, “Vendors are reducing their cost structure because they know that they are about to get into a massive war, both against each other and against all of the other financial decisions that large enterprises have to make,” said Hyoun Park, chief analyst at Amalgam Insights, a technology research firm. 

And while we’re on the Seattle-based giant, Monday was the beginning of the company’s new Cloud Partner Program, replacing the Silver and Gold Competencies.    Pour one out for those old designations. 

Microsoft remains the key partner, or simply vendor, in their go-to-market strategy for most providers. Understanding where they are making money (and what they value) is important to maximize the relationship.        Azure is about 15% of that cloud number for last fiscal year, and we know it’s growing pretty fast based on previous numbers.   

The context here is that Infrastructure as a service and software as a service are different businesses for both Microsoft and providers.    Microsoft’s presentation to the market is for investors, not a reason to follow that model.  Tracking within providers should make these distinctions.    

The other reason to care – even the big providers are concerned about customer perception of costs here.   Managing cloud costs is a service to make key – don’t overlook this… although I’d warn it’s not the total solution either.