The battle for cloud computing market share continues to be an interesting one. Amazon is the clear leader, and its a sidelight to their core business. Microsoft is a rapidly growing second place competitor, but it has pretty much bet the company on its cloud strategy ( I wrote about this almost a year ago here).
Of all the charts in the report – this one interested me the most:
Looking at this chart, its pretty clear that Microsoft’s Azure is still gaining on Amazon. However, Google Cloud is coming on strong. Google has recently made interesting enhancements to its offerings, and is pricing its products very aggressively. In 2016 I had the opportunity to work as part of a team evaluating moving applications to Azure, and in our case it was not an easy slam dunk. To get our application to run on Azure, we will have to revamp our database architecture to run under the limitations of Azure Cloud database. Had we written this application initially to run on a cloud database we would have made different architecture decisions, and it would have made it much easier. My current bias would be migrating existing applications over to run in the cloud is a lot more complicated than starting from scratch in the cloud. So I will be interested to see how many of the people listed as ‘Experimenting’ and ‘Plan to Use’ end up being successful in running in the cloud.
Another interesting point in this report was that 85% of respondents have a multi-cloud strategy. Theoretically, building an application that can fail-over across clouds should be doable, and it provides a nice redundancy for maximizing up-time. Again, this would be more difficult to modify existing applications to support this feature.
I still think those companies who are dependent on succeeding in the cloud as a future revenue source (I am looking at you Microsoft and IBM) will find it tough to make earnings targets. I think this is a tough commodity business with price cuts continuing (Amazon has cut its prices 52 times since 2006). I suppose it’s possible that one of the companies will come out with an offering that is better than the rest (I am thinking of something like IBM’s Watson’s cognitive services), but with the money all these deep pocketed companies are investing in this it seems hard to believe. I do think this is a huge growth opportunity, but which company will win and how much will be left to win still looks like a crapshoot.
So the cloud is still the future for Enterprise Tech. I just hope these companies are ready for the shrinking margins that will come with it.