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Microsoft ’s ( MSFT ) Azure cloud computing service is a money-loser for the software giant, but that should change this year, investment bank Goldman Sachs said in a report Sunday. Azure is the second largest cloud platform and infrastructure service, but it trails Amazon.com ( AMZN )-owned Amazon Web Services by a mile. In 2015, Microsoft’s Azure generated $1.81 billion in sales, up 112% from the prior year. But its gross profit margin was -6%. That’s an improvement from the -17.1% gross margin in 2014, Goldman said. By comparison, AWS raked in $7.88 billion in sales last year, up 70% from 2014. Its operating profit margin was 23.7% in 2015, up from 14.2% in 2014. Goldman predicts that Microsoft’s Azure sales growth will continue to outpace AWS this year and turn profitable as well. It forecasts Azure generating $3.46 billion in sales, with a gross margin of 9.2%, in 2016. For 2017, it sees Azure racking up $6.18 billion in sales, with a gross margin of 20.9%. But Amazon is likely to maintain its solid revenue lead. Goldman estimates that AWS sales will jump to $12.50 billion this year and $19.13 billion in 2017. It sees the operating margin for AWS increasing to 29.3% in 2016 and 29.5% in 2017. Goldman predicts that AWS and Azure will take market share from smaller rivals this year and next as smaller rivals struggle, with some exiting the market. AWS boasted 39% market share in the public cloud segment last year, vs. 9% for Azure. AWS is forecast to reap 46% market share this year and 54% in 2017. Meanwhile, Azure is seen growing to 13% market share this year and 17% in 2017. RELATED: Google Seen Slashing Cloud Pricing Vs. Amazon, Microsoft . Image provided by Shutterstock . Scalper1 News
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