Looking at the May 2014 Gartner Magic Quadrant vs the August 2013, it quite evident that Microsoft Azure IaaS is catching AWS in terms of functionality, automation and innovation. They are not quite there yet but at the very least they are putting pressure on AWS and AWS is responding in parts by reducing their prices and continuously announcing improvements to their service. For example, AWS now have General SSD storage that can be provisioned to their standard EC2 instances (VMs).
Here’s a full wrap up of the latest Cloud Infrastructure as Service Magic Quadrant article from Gartner (here).
Notice below in August 2013, Microsoft is in the bottom right hand side Quadrant (Visionaries).
Now in May 2014, Microsoft is in the sweet spot (Leaders), top right hand side Quadrant along with AWS.