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Microsoft Azure gaining steam but Amazon's AWS still holds top spot - Jefferies
By: Investing | December 20, 2023

Microsoft (NASDAQ:MSFT) Azure is gaining steam in the cloud market, according to Jefferies analysts in a note Wednesday. However, Amazon (NASDAQ:AMZN) Web Services (AWS) "still wears the crown."

Jefferies surveyed 40 U.S. CIOs and found that both platforms are best positioned to gain incremental spend over the next two years, with 80% of CIOs planning to boost cloud spending in 2024.

According to the firm, Azure screened positively, with a higher share of CIOs planning to spend "significantly more" over the next 24 months.

"We continue to believe AWS is well positioned to capture growing cloud spend and drive large incremental dollar gains, supported by its strong market position, broad product suite, strong partner network and improving AI positioning," said Jefferies.

For AWS, 80% of CIOs expect their cloud spending to increase year-over-year in 2024, while 3% expect it will decline, and 18% expect it will be unchanged.

"We believe the cloud industry is setting up for an acceleration in '24 as cloud cost optimizations fade and companies look to restart their digital transformations," said analysts at the firm.

However, they noted that AI and ML are not major drivers behind why customers intend to increase cloud spend. Instead, customers who plan to increase their AWS and Azure spend said compute and storage were the two primary reasons.

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