How Azure rose to the ranks as a cloud giant

The sky is the limit—unless you’re Microsoft, in which case, it is a booming business line that has solidified its place as a top cloud giant over the years.

When talking about cloud hyperscalers in the industry, Azure is a name that is hard to ignore. According to Synergy Research Group, Azure had a global market share of 22% in Q1 2025. In the same period, AWS had a global market share of 29%, while Google Cloud had 12%.

To understand how Azure secured a spot as one of the Big Three, IT Brew caught up with cloud computing experts to learn about some of the core decisions made in the cloud giant’s early days that positioned it for success.

Origin story. Mark Russinovich, Azure CTO and technical fellow, told IT Brew that the story behind Azure began in 2006 when Dave Cutler, known for his key role in the development of Windows NT, set off on a project to create a platform for the emerging “software-plus-service era.” The internal project was known as Project Red Dog.

“This team with Dave, under [then Microsoft Chief Software Architect] Ray Ozzie, started to look around the company and talk to different teams that had services, including teams like Hotmail and the Windows Live team, about what they needed to make it easier for them to run services,” Russinovich said.

Azure, formerly Windows Azure, was officially announced in 2008 at the Professional Developers Conference and made its commercial debut in 2010. Brand-naming agency Lexicon claims to have come up with the name Azure, which means sky blue, to reflect Microsoft’s “new attitude” and the “open-ended and flexible nature” of the platform.

“As far as the name Azure, marketing picked that,” Russinovich said. “I thought it was an odd pick at the time because Azure is the color of the sky with no clouds in it, which is the opposite of cloud.”

Wade Wegner, a director of technical evangelism for Azure from 2010 to 2012, told IT Brew that Azure was immediately attractive to Microsoft’s “loyal base,” which included .NET developers. However, outside of that, things looked slightly different, partly because of Amazon Web Services’s (AWS) first-mover advantage in the space.

“The broader developer ecosystem actually was centered and flocking around what AWS was doing and it was hard for us, especially early days, given we had such a very specific platform as a service approach to building for the cloud,” Wegner, now a chief ecosystem and growth officer at DigitalOcean, said.

Karthik Ranganathan, founder and co-CEO of Yugabyte, an open-source distributed SQL database company, added that Microsoft’s later entrance into the cloud market ultimately became a focal point for industry onlookers in Azure’s early days. Ranganathan worked as a software design engineer at Microsoft between 2005 and 2007.

“The critics would point out that this gap is going to be very tough to bridge because Amazon’s running away with it, or so to speak,” he said.

Strategic moves. Still, several decisions made along the years helped propel the cloud giant as a serious contender in the cloud race. For starters, Russinovich said the company’s move to release Azure Virtual Machines, an infrastructure-as-a-service (IaaS) offering, in 2012 “unlocked a lot of business.”

“What we found was, there were customers that wanted that kind of convenience of what the platform could do for them but a lot of enterprises had existing software that they wanted to just migrate into a cloud platform, and not having an IaaS capability meant that they couldn’t use Azure,” Russinovich said.

Russinovich added that Microsoft’s growing support of open-source, 2018 acquisition of GitHub, and strong relationship with enterprises also shaped Azure’s trajectory.

“We had this long history of relationships and understanding what enterprises wanted,” Russinovich said. “So, we could bring that to the design of our platform from a security, reliability, operation, [and] support perspective.”

Others, like Cockroach Labs Senior Director of Global Alliances Cassie Zimmerman, credit current Microsoft CEO Satya Nadella, who took on the role in 2014, as another big driver behind Azure’s trajectory. (Cockroach Labs is an Azure database partner.)

“He was really the one who came in and declared Microsoft as this cloud-first, mobile-first company,” Zimmerman said. She pointed to Azure’s rebrand from Windows Azure to Microsoft Azure shortly after Nadella took the reins as a reflection of that shift.

The AI era. Today, Russinovich said Azure is in the “AI era.” Recent decisions at the company actively reflect this. Microsoft has partnered with OpenAI since 2019 and has pumped nearly $14 billion into the AI giant. At this year’s Build developer conference, the tech company announced that it recently added xAI’s Grok 3 models to the Azure AI Foundry, along with several updates to the unified application platform.

Ranganathan said Microsoft’s early wager on AI has ultimately paid off.

“I’m sure they diversified into a lot of bets and this was the bet that really started taking off in the market,” Ranganathan said.

Beyond AI, Ranganathan said industry onlookers may be waiting for the cloud giant to “round out” its offering for those that fall outside of its enterprise audience.

“Its origins were so much in the enterprise stack…that some of the workflows and some of the ways that developers consume it, it’s complicated,” Ranganathan said. “It works great for large enterprises. It’s difficult for a startup sometimes.”