Microsoft's developer tools are the best in the business, but customer concerns over its cloud capacity could hurt its ability to compete with Amazon and Google, new research shows

  • According to Gartner's cloud ranking in its latest annual "Magic Quadrant" report, Microsoft is in second place, behind Amazon Web Services and ahead of Google Cloud.
  • As it Microsoft strives to catch up to AWS, it has two weapons: Strong relationships with large business customers and its application developer tools, Gartner says.
  • However, there are challenges, too: Customers have expressed concerns about Microsoft's cloud capacity and its technical support, Gartner says.
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As Microsoft works to catch up to Amazon's first place spot in cloud, it has two secret weapons in its toolbox.

Microsoft's Azure ranks behind AWS — but ahead of Google Cloud — in Gartner's recent "Magic Quadrant report, which ranks cloud services with categories like "ability to execute" and "completeness of vision." However, it has the greatest market share of application developer tools, Gartner says, and a successful propensity to win over its existing enterprise customers with new tools. 

"The thing [Microsoft does] really well at is leverage enterprise relationships they have," Raj Bala, research director at Gartner, told Business Insider. "Lots of enterprises make decisions to use Azure because they're happy with Microsoft overall. That's something that's certainly playing towards their strengths."

Those strengths aside, Microsoft also has weaknesses, too, the report found: The firm falls behind on technical support and giving customers guaranteed capacity, Gartner said. 

Microsoft leads the way in working with large businesses and app developer tools

Azure is strong in all use cases, Gartner says, and it's especially suitable for organizations already using Microsoft software, as they can bundle various services, as well as those that use products from Microsofr partners Oracle, SAP, and VMware.

Microsoft was the first major cloud to promote hybrid computing, which allows customers to use both the public cloud and their own data centers, which can help win over customers in highly regulated fields like finance.

The government is also a major customer of Microsoft's, and they've been working together for decades. Most recently, Microsoft scored a victory when the Department of Defense upheld its decision to award it the $10 billion Joint Enterprises Defense Infrastructure contract, a cloud computing contract with the Pentagon.

Outside of traditional large business customers, Microsoft has been working to win over developers to its cloud. 

"Microsoft is making a concerted effort to better serve software developers, particularly through its efforts with OSS," the report said, referring to open source software. 

Read more: Here's why 8.5 million users love Visual Studio Code, the free software that's helping Microsoft win over programmers in the cloud wars with Amazon

In the 1990s and early 2000s, it was known to wage wars with open source projects like the Linux operating system, but now it's completely embracing them and an active contributor to many open source projects. Plus, it now has products like Azure DevOps, Visual Studio Code, and GitHub under its belt. Visual Studio Code is the top open source project on GitHub, with 8.5 million users each month, while GitHub now has over 40 million users. 

Customers have concerns about Azure's capacity and technical support

Today, Microsoft Azure has data centers in the US, Canada, Europe, India, the UAE, South Africa, Japan, and more. However, it has the lowest ratio of availability zones to data center regions of any cloud provider and it doesn't provide guaranteed capacity to customers. 

"They're quite a big behind on the notion of availability," Bala said. "They're quite a big behind on outfitting their regions with availability and concepts. Their overall resilience story isn't as good as some of the young challengers."

Earlier this year, Microsoft faced a surge of users during the coronavirus capacity that created capacity issues and placed some "temporary restrictions" on customers' usage. When Gartner spoke to clients in Europe about capacity issues with Azure, some customers said they couldn't use the capacity that they already paid for. To address these issues, Microsoft has focused on building up its cloud to be more resilient, Bala says.

Microsoft's technical help — called Unified Support — can be expensive, especially for customers that don't already use other Microsoft apps, and many clients expressed concerns about the quality of Azure's technical support and field sales technical skills, Gartner says.

Business Insider has reached out to Microsoft for comment.

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