Dive Temporary:
- Microsoft acquired a stern rebuke from the U.Ok. Competitors and Markets Authority Thursday after a banner 12 months for its cloud division. Azure cloud providers income elevated 34% 12 months over 12 months to greater than $75 billion within the 12 months ending June 30, Microsoft Chairman and CEO Satya Nadella stated within the firm’s Q4 2025 earnings release.
- Competitors within the UK cloud market is “not working effectively,” the CMA stated in its final decision, which singled out Microsoft’s software program licensing practices for “adversely impacting the competitiveness of AWS and Google within the provide of cloud providers.” The market watchdog advisable actions that will “impose focused and bespoke interventions” to treatment the scenario.
- Microsoft reiterated objections raised in a February response to the investigation. “The CMA Panel’s most up-to-date publication misses the mark once more, ignoring that the cloud market has by no means been so dynamic and aggressive, with report funding, and speedy, AI-driven adjustments,” the corporate stated in an e-mail. “Microsoft appears to be like ahead to working with the Digital Markets Unit towards an end result that extra precisely displays the present competitors in cloud.”
Dive Perception:
Microsoft is one among three U.S. cloud superpowers that collectively dominate almost two-thirds of the global market for infrastructure services. AWS leads with 29% of the market, adopted by Microsoft and Google Cloud, whose shares are 22% and 12% respectively, in line with Synergy Research Group May analysis.
In Europe, the trio’s mixed footprint is even bigger proportionally, swallowing up 70% of the area’s $70 billion in cloud spend final 12 months, Synergy Analysis Group knowledge present. Europe-based suppliers noticed their collective share contract from 29% in 2017 to its present degree of 15% in 2022, the analyst agency stated in a July report.
A surge in demand for cloud providers, pushed by AI adoption and ongoing workload migrations, sparked a hyperscaler constructing growth that has but to subside.
Microsoft alone dedicated $80 billion to capital investments in its 2025 fiscal 12 months and spent $24.2 billion through the closing quarter, which included greater than $17 billion on property, crops and tools, EVP and CFO Amy Hood stated Wednesday. The corporate expects CapEx to exceed $30 billion within the subsequent quarter to fulfill escalating demand.
“At the same time as we proceed bringing extra datacenter capability on-line, we at the moment anticipate to stay capability constrained by way of the primary half of our fiscal 12 months,” Hood stated. “We have now $368 billion of contracted backlog we have to ship, not simply throughout Azure, however throughout the breadth of the Microsoft Cloud.”
Azure’s progress spurt helped the cloud unit ship greater than one-quarter of Microsoft’s $281 billion in income for the 2025 fiscal 12 months. Clever Cloud, the bigger division encompassing Azure, accounted for $106 billion or over one-third of the corporate’s income for the 12-month interval.
Giant clients helped drive Azure’s expansions, Nadella stated, pointing to meals and beverage behemoth Nestlé, which shuttered six aging data centers by way of an enormous migration of over 200 SAP cases and 10,000-plus servers.
Microsoft 365 Copilot, the generative AI chatbot embedded within the firm’s cloud-based workplace productiveness suite, additionally contributed to the cloud utilization surge. The corporate added two sales-focused AI agents to the Copilot household in March and added a pay-as-you-go Copilot plan initially of the 12 months.
“Prospects proceed to undertake Copilot at a sooner charge than another new Microsoft 365 suite,” Nadella stated, citing Barclays’ plan to equip 100,000 employees with the instrument after an preliminary deployment to fifteen,000 colleagues.
