Cloud will surpass Windows as Microsoft's revenue driver in 3 years, analysts say

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Microsoft's cloud business will generate more revenue than the company's Windows operating system by 2021, according to an analyst note reported by CNBC.

KeyBanc Capital Markets analysts Brent Bracelin and Clarke Jeffries projected Microsoft's cloud computing service Azure will account for 16.6 percent of the company's business by 2021, while Windows will account for 12.8 percent, they wrote in a note to clients Dec. 6.

Today, Microsoft's cloud service is second to Amazon Web Services in the market. However, under CEO Satya Nadella, Microsoft has placed a larger emphasis on cloud computing. In October, Microsoft said Azure's revenue increased 76 percent during the first quarter of its 2019 fiscal year.

During the company's 2018 fiscal year, revenue from Windows hit $19.5 billion, representing 17.7 percent of Microsoft's revenue. The KeyBanc analysts estimated Azure had $7.1 billion in revenue during the period, or 6.4 percent of the company's total revenue.

However, by fiscal year 2021, the analysts suggested Azure will hit $26.4 billion in revenue, compared to only $20.3 billion from Windows.

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