Amazon’s cloud computing platform is the unquestioned leader in its industry, with Amazon Web Services (AWS) surpassing rivals in its sheer capacity, global presence, and in many of the capabilities it offers. But competitors are keen to grab more of that market share, especially with a growing appetite for cloud services in the enterprise sector.
AWS, which celebrated the tenth anniversary of its cloud computing offerings this year, currently accounts for about 31 per cent of the global cloud infrastructure market, and is predicted by many to become a $10 billion business by the end of this year.
In fact, AWS earned revenue of $3.2 billion during the third quarter of the current financial year, up 55 percent on the same period last year and making it Amazon’s most profitable division.
This success is due in no small part to the fact that AWS has a presence on almost every continent, with 14 geographic regions supporting 38 ‘Availability Zones’, but also to the fact that it has built up the broadest portfolio of services and application programming interfaces (APIs) of any cloud provider.
However, rivals are now starting to gain some ground, with both Microsoft’s Azure and the Google Cloud Platform reporting upwards of 100 per cent year-on-year growth earlier in 2016. IBM, which saw 57 percent growth, is the other major rival for AWS, with the four of these companies now accounting for more than half of the entire cloud services market between them.
The growth seen by these providers reflects an increasing demand for cloud services from large organisations, with IDG Enterprise’s recent Enterprise Cloud Computing Survey showing that at least 70 per cent of firms now have at least one application in the cloud, but that 56 per cent indicated they were still in the process of identifying IT processes that could be candidates for migrating to an external cloud.
The largest growth is still coming from the US, where the cloud market is more mature than in other regions such as Europe, and businesses have become more comfortable in moving workloads out to a cloud provider.
But the key thing to keep in mind is that there is no “one size fits all” in cloud computing, as in most other areas of IT. While AWS may appear to have the cloud market sewn up, choosing a cloud provider that is right for your organisation comes down to more than just considerations of size or the lowest price per unit of compute or storage.
For many organisations, having a trusted partner that will provide a deep level of support and an understanding of your operational priorities is likely to rank high on your wish list, as well as concerns about data sovereignty and control over exactly where your data is stored.
AWS has also drawn criticism for its contractual flexibility, or rather the lack of it. Typically, customers are billed for using its services on a pay-as-you-go basis, whereas most businesses would rather negotiate a proper contract. This is an area of opportunity for other providers, especially those willing to provide a more nuanced level of service.
Both Microsoft and Google are seeking to expand the footprint of their respective cloud platforms by adding data centres in more territories. Microsoft has recently opened new facilities in the UK and Germany, and plans further expansion in France next year.
Google, meanwhile, announced plans to rapidly expand its own global presence with a dozen additional regions due to come online before the end of 2017, starting with a US Western region in Oregon and an East Asia one hosted in Tokyo.
Having a presence in many different regions is important because it cuts latency between any particular customer site and the cloud provider’s datacentre, and thus delivers better performance for cloud-hosted applications and services.
Azure appeal for Windows shops
Microsoft’s Azure in particular is tipped to be a beneficiary of the growing corporate interest in cloud services. One reason for this is that Microsoft is developing a strong hybrid cloud proposition that is more appealing to large organisations with existing Windows-based IT infrastructure, while AWS has traditionally appealed to start-ups looking to host everything online.
The recently launched Windows Server 2016 is starting to infuse more cloud-like capabilities, for example, such as software defined networking and software defined storage, while the System Centre 2016 management suite makes it easier for administrators to manage both on-premises and cloud workloads from the same console.
In addition, Microsoft is preparing a product called Azure Stack that will effectively deliver an on-premises version of Azure that organisations can deploy into their own data centre.
However, while this will help to deliver a seamless hybrid cloud experience for organisations that subscribe to the Azure public cloud, Microsoft has come under fire from potential customers for announcing that Azure Stack will only be available pre-integrated with hardware solutions from vendors such as Dell EMC, HPE, and Lenovo, rather than customers being able to deploy it on existing systems.
IBM, the fourth major cloud player, first detailed its cloud expansion plans in 2014 when it acquired SoftLayer, and recently opened a facility in Norway as its 48th global cloud data centre.
The firm also continues to evolve its cloud offerings, and recently detailed plans to integrate its SoftLayer infrastructure services more closely with its Bluemix developer services to allow IBM Cloud customers to use a single dashboard to manage all infrastructure and services. IDG Connect also understands that IBM will shortly announce new UK datacentres – the company declined to comment.
But AWS has also now come around to the realisation that many customers are not about to migrate everything to the cloud in the near future, and that a hybrid cloud strategy is going to be the reality for the majority of enterprises.
This can be seen in the recent partnership between AWS and VMware that enables the VMware stack to run on Amazon’s cloud, and letting VMware private cloud customers extend out to the AWS public cloud using the same management console and without re-architecting their applications.
In short, it seems unlikely that Amazon’s rivals are likely to catch up with AWS in the near future, especially as its share of the market is greater than that of Microsoft, Google and IBM combined. Ultimately, this does not matter a great deal so long as there is enough choice in the market for businesses to find a solution that matches their requirements, and it is still early days for the cloud industry with plenty of scope for things to change.
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