- Bill Gates is currently around $ 1 billion richer than Jeff Bezos.
- For Gates ‘net worth to stay above Bezos’, he’ll need Microsoft’s most boring division – cloud computing – to remain ridiculously lucrative.
- Luckily for Gates, Azure could become the software maker’s biggest business by 2023.
Microsoft cofounder Bill Gates recently dethroned Amazon CEO Jeff Bezos as the world’s richest person, according to theBloomberg Billionaires Index.
Gates’ triumph was doubly sweet because it came after Microsoft beat out Amazon towin a $ 10 billion cloud-computing contractfrom the US Department of Defense. Gates currently owns $ 15 .5 billion worth of MSFT stock – nearly 15% of his
Microsoft Azure crucial to Bill Gates’ net worth
It’s appropriate that a cloud computing announcement pushed Gates into the lead on the net worth charts. If he is to stay ahead of Bezos, his best hope lies in the continued growth of Microsoft’s cloud division, Azure.
According to a recent Stifel Nicolaus research note, that’s a safe – if boring – gamble. Analyst Brad Reback observed that the $ 10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract has opened the door for Microsoft to receive similar mega-contracts.
Reback predicts thatAzure could be Microsoft’s biggest business by 2023based on rapidly growing demand:
Over the last several quarters, it has become increasingly clear, based on large cloud deal activity and strong hybrid cloud growth, that as enterprises of all sizes begin their respective digital transformation journeys, Microsoft is effectively tapping into sizable Tier-1 enterprise workloads that it was not directly exposed to in the client / server world.
Watch your back , AWS!
In recent quarters, some of the firms that have inked deals with Azure in clude Walt Disney Studios, Walgreens, BMW, and AT&T.
Reback expects Azure to be a $ 35 billion business in fiscal 2022. But by fiscal 2023, Azure will be a bigger business than Microsoft’s current cash cows – the Server and Tools businesses, Office productivity software, and the Windows operating system – combined.
Moreover, Microsoft Azure has beengrowing at a faster ratethan Amazon Web Services in 2019. In its most recently reported quarter, AWS enjoyed 35% revenue growth. Microsoft Azure’s revenue swelled by an astounding 59% over the same period.
The most expensive affair in the world?
To be fair, Bezos’ drop in the billionaire rankings wasn’t just about cloud computing. It was aided by his divorce earlier in the year followingan extramarital affair.
Prior to hisrecord-setting divorce, he owned about 17% of Amazon’s shares. Currently, his stake is about 12%. Mid last year, when hewas comfortably the world’s richest person, he had opened a gap of $ 50 billion with his nearest rival.
But Amazon’s stock has also been appreciating at a slower pace than Microsoft’s.
Since the start of the year, Microsoft’s stock has grown by close to 50%, making it the Dow’s second-largest gainer year-to-date after Apple. Amazon, on the other hand, has appreciated by less than 20% since January.
This article was edited by Josiah Wilmoth.
Last modified: November 19, 2019 17: 50 (UTC
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