The company said its latest estimates showed that AWS earned US$7 billion in revenue in the quarter, a rise of 46% year-on-year, while Azure pulled in US$4 billion, a much larger rise in percentage terms, coming in at 76%.
The year was one of rapid growth, Canalys research analyst Daniel Liu said. "...businesses accelerated digital transformation projects and workload migration [during the year]," he said. "This is set to continue in 2019, with more customers adopting multi-cloud strategies, including hybrid IT.
"AWS maintained momentum due to traction from its enterprise customers, while Microsoft's progress benefits from its longstanding hybrid IT initiatives, taken up by its large base of on-premise customers."
Canalys said AWS had 60 cloud infrastructure locations worldwide with 12 more being built in Bahrain, Hong Kong, Italy and South Africa. As a result of this activity, Amazon's Capex reached US$26 billion in 2018 though the growth rate slowed to 7% year-on-year.
In the case of Microsoft, Capex reached US$14 billion in 2018, an increase of 64% year-on-year. The company has 54 cloud regions globally, and another 10 in Western Europe and Africa in the pipeline.
The company said the need for data sovereignty, lower latency and higher performance, plus competition, was driving cloud providers to increase infrastructure investment and bring data centres closer to customers.
"The investment needed to build new interconnected cloud data centres is huge, and due to the constant pressure to optimise data centre operating costs, refresh cycles are shorter as they drive innovation," said Liu.
"Cloud providers are under pressure to be profitable and have to manage Capex. The signs are they are currently focusing more on capacity utilisation, which will be reflected in their Capex numbers in the first half of 2019. This will impact infrastructure and component suppliers in the short term."