Microsoft has momentarily passed Amazon in this one key area

Satya NadellaMicrosoftMicrosoft CEO Satya Nadella

One of Satya Nadella’s big challenges when he took over as Microsoft’s CEO was shifting the company from its traditional business of selling packaged software that runs on companies’ own computers to selling “cloud” services that companies can pay for as they go.

That shift is going pretty well. In the company’s earnings report for the quarter ended June 30, Microsoft says it had a $12.1 billion “run rate” in its commercial cloud products.

In English, that means that if you take the amount of money Microsoft is collecting on cloud contracts right now, and extrapolate it out over a full year assuming no growth or churn, it would generate $12.1 billion for the year.

By way of comparison, Amazon said on its Q1 earnings call that its cloud services were on a $10 billion run rate. Amazon is expected to post Q2 earnings on July 28.

Here’s what Microsoft’s cloud run rate looked like prior to the June quarter:

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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