A slowing in Amazon’s Web Services’ astronomical growth rate of recent years has, according to some commentators, made it look as though Microsoft and Google have more of a chance of stealing at least some of its cloud market share.
This latest round of speculation about whether the two leaders of the pack chasing a bigger share of the enterprise cloud market has been triggered by the release and the trumpeting of the healthy financial figures by all three.
At the heart of the speculation that Microsoft and Google may be gaining a little on AWS (which is, realistically, still in a league of its own) is the assumption that a growth rate that big, combined with a huge number of customers (surely) can’t be sustainable.
Major drivers for growth of in the enterprise cloud market have been the need to get way from the cost and risk of data centres, the attractiveness in the flexibility (and security) that the infrastructure as a service (IaaS) cloud model offers.
Comparing The Three
Few analysts would doubt the complete dominance of AWS, and an accurate, side-by-side comparison of the latest figures is hampered by the fact that Google does not separate out the contribution that the cloud makes to its overall financial results. Nevertheless, it is possible to compare some key aspects of AWS, Google and Microsoft’s position in the IaaS market such as:
The key point is, therefore, that even though Microsoft and Google are displaying impressive and rising growth rates in their cloud businesses, a declining but still good growth rate for a company such as AWS that already has huge market share, economies of scale and the resulting pass-along lower pricing, makes realistic challenges to its dominance look unlikely for the near future.
Google Trying To Be More Attractive To Enterprises
Alphabet (Google) has reported that its improved growth rate figures in the cloud business are the result of its two-year-long efforts to make its cloud business more enterprise-friendly.
What Does This Mean For Your Business?
Information Services Group (ISG) figures, for example, showed that in 2016, traditional business outsourcing contracts were being replaced by cloud-based services to the point where spending on cloud-based contracts increased by 33% compared to 2015. Many more businesses are realising that new kinds of cloud-based contracts offer many different and attractive models such as software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS), all of which essentially provide flexibility / scalability, easier management and upgrades, and lower costs. With greater competition between AWS, Google, Microsoft, and other players in the cloud market, enterprises may enjoy even lower cloud costs and improved service offerings in the future.