How to Capitalize on the Coming Cloud Wars

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How to Capitalize on the Coming Cloud Wars

Want a big picture of what the current leading cloud vendors are up to, how they're fairing in comparison to each other, and where their headed next? Look no further, author Darren Perucci sums up the space quickly and thoroughly in this piece.

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If you’re involved in cloud technologies—whether as a customer, a provider, or both—you best hold onto your hat. Things are about to get very interesting...

Whether You're in Managed Cloud Services or Managed Private Cloud, Cloud Wars Are Coming. Are You Prepared?

First out of the gate in the run for cloud supremacy was Amazon, whose Amazon Web Services has completely changed the game in the 10 years since its initial release. Tech Crunch’s Aaron Levie writes in a March 20, 2016, article that Amazon offered the one thing enterprises needed most in a cloud service: scale. The company’s experience selling to "the masses" via the web gave it an edge over the other early entries in the burgeoning cloud services industry of a decade ago.

Amazon’s ability to offer reliable cloud storage and processing at low prices over a wide region gave the company a leg up in the early race for cloud market share. The jumpstart was facilitated by early missteps taken by Google, Microsoft, and other would-be competitors, according to Levie. However, it would be a big mistake to conclude from the initial returns that Amazon’s lead is insurmountable.

According to VentureBeat’s Jordan Novet in a January 28, 2016 article, Amazon Web Services recorded $7.88 billion in revenue in 2015 and $2.4 billion in the fourth quarter alone. The fourth-quarter numbers represented a 69 percent increase from the same period a year earlier. As impressive as those figures may appear, they pale in comparison to the projections for total cloud-service revenues in coming years.

Forbes’ Roundup of Cloud Computing Forecasts and Market Estimates for 2016 indicates total spending on public cloud IaaS will reach $173 billion in 2026, compared to $38 billion in 2016. Likewise, PaaS and SaaS revenues are expected to soar from $12 billion in 2016 to $55 billion in 2026, according to figures from Statista.

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Public cloud infrastructure spending is forecast to more than quadruple between 2016 and 2026, indicating that the battle for cloud supremacy has just begun. Source: Statista

Attention Shifts From Price/Performance to Differentiation 

As Tech Crunch’s Levie writes, “selling commoditized infrastructure is only fun for so long.” He predicts the cloud industry will refocus on custom packages of applications, which is likely to boost Google’s cloud business. No company can match Google’s “arsenal” of search, Gmail, YouTube, maps, Docs, and others. Similarly, IBM’s cloud efforts are likely to benefit from the company’s experience offering industry-specific solutions, consulting, and cognitive-computing services.

It can be dangerous to underestimate the potential of Microsoft to take a big bite out of Amazon’s lead in the cloud-services sector. Jason Hitchings writes in an April 15, 2016, post on Capital Market Labs that IT managers still consider Microsoft their “most critical and indispensable” vendor. A recent survey by J.P. Morgan Research of 207 CIOs at large enterprises found that 46.9 percent named Microsoft as the vendor they bank on the most. Amazon Web Services was named by 13 percent of the CIOs, followed by Cisco (11.6 percent), Oracle (11 percent), and SAP (9.2 percent).

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Microsoft remains the vendor CIOs consider “most critical and indispensable” to their IT operations. Source: J.P. Morgan Research 

Microsoft Azure is expected to get a boost from the company’s broad suite of products geared to data centers and corporate offices. Much of Microsoft’s growth in cloud market share is expected to come at the expense of HP, IBM, and Oracle, according to the J.P. Morgan researchers.

Two companies that haven’t yet announced their own cloud services but still cast a long shadow over the industry are Apple and Facebook. Apple is expected to leverage its popular iCloud consumer service by opening it to the public cloud, and while Facebook’s public-cloud plans are complete speculation at present, there’s no denying that the company’s astounding growth to a billion-plus users would not have been possible without cloud computing. Most analysts assume Facebook will explore ways to capitalize on its cloud expertise.

Where the Three Public Cloud Leaders Are Heading 

From a customer’s perspective, the cloud offerings of Amazon, Google, and Microsoft are more similar than they are different—at least for the moment. In an April 5, 2016, article in Business Insider, Matt Weinberger quotes Pivotal executive James Watters stating companies are choosing their cloud provider based on their organization’s own “business logic” rather than on specific features of the cloud services themselves.

Weinberger offers two examples: Logistics and shipping companies are switching from AWS as a result of Amazon’s move into those sectors; and, the auto industry is shying away from Google’s cloud offerings due to the company’s efforts to develop self-driving vehicles.

Many Fortune 500 companies already have contracts with Microsoft for Windows and Office licenses, which means the customers can easily bundle Azure compute capacity for not much more than the cost of the software licenses. Joshua McKenty, another Pivotal executive, states that the companies end up choosing Azure “by default.”

What sets Google apart from its cloud competitors is that it is “the purest at at-scale infrastructure,” according to Watters. He points out that Google’s transition to enterprise customers will take time, but no company can match Google’s track record for hosting apps reliably on high-capacity, high-performance systems.

Google is far from the only cloud provider targeting enterprises. Amazon recently unveiled the AWS Data Migration Service designed to simplify the process of moving data between in-house systems and the cloud, as well as between cloud services. According to the Wall Street Journal’s Jay Greene in a March 15, 2016, article, more than 1,000 databases from “many hundreds” of companies have been migrated successfully using an earlier version of the AWS tool.

Whether your organization is new to cloud services or a long-time denizen of the cloud, you have to keep your options open to ensure you’re ready to capitalize on tomorrow’s advances. The best way to future-proof your apps, databases, and other systems is by using a flexible, reliable, safe, and open management service such as Happy Apps.

cloud, cloud analytics, cloud application, cloud infrastructure, iaas, managed cloud, managed cloud solution

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