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In contrast with the news that Rackspace has left the IaaS provider market, the recent earnings reports from Microsoft and Amazon show that these two major players are further settled into this market. But how comfortably? Based on what they reveal about those earnings It’s hard to tell, but we can look at their histories. While numerous contenders vie for market share, it seems that Google, Azure and AWS may be settling in for a long, slow, triple duel. Or a stalemate. However it may unfold, it makes for fascinating discussion.
Alex Williams and co-host Michael Coté talked with Nancy Gohring about Microsoft Azure’s success, what it might mean for AWS, and what it might mean to Apple and other competitors in the cloud.
For reference please see Nancy’s related post.
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Neither Microsoft nor Amazon break out their numbers very well, so it’s mostly guesswork as to performance of specific sectors. Both are reporting growth in the cloud market.
Microsoft is seeing growth in both cloud services as well as server sales, upholding its “hybrid” story-line that customers are both growing internal data centers and expanding cloud utility.
Microsoft may have the upper hand for now, as Amazon is relatively new to higher-level services such as Desktop as a Service.
Amazon’s reported 90% growth in cloud services was raw usage, not necessarily revenue; price cuts must affect revenue, and Wall Street seems to have green-lighted Amazon to play the long game on pricing, which is to Amazon’s advantage.
What are people deploying on these cloud services – custom applications, general storage, old VMware? Amazon wants to be the generic vendor, whereas Microsoft thrives on perpetuating its legacy ware. The wild card is Google, presumably a pure developer cloud.
Long-term, non-storage composition of the cloud? Depending on how long packaged software hangs on, SaaS takes over completely maybe within 10 years. Between Azure, AWS and Google it will come down to developer devotion, and to tactics.
It may be a long, slow battle among these giants, and lest we ignore Apple’s recent moves. The IBM/Apple deal may involve desirable business apps, but bigger companies are going to custom develop in-house.
Desktop as a Service sounds great, but is not as satisfying to end-users. Several large installs exist but they’re suited for managing (constraining) lower-tier users. High-quality virtual desktops are about as expensive as actual desktops. Value of Desktop as a Service is in ability to tie in peripheral resources.
Desktop as a Service seems unwilling to die but where are the advocates? Is this AWS hedging its bets? Amazon is spending a lot on infrastructure, which means low-cost barrier to deployment and to consumer entry; but marketing and support is inadequate, so who’s buying what they offer?
VMware and Citrix are both encouraging the market for Workspace as a Service, but they are both long-term stakeholders.
AWS trying to go deep on back-end and middleware. Market can’t support all of the big and small vendors. AWS and Azure are building these services themselves rather than buying smaller companies.
Trend of smaller companies remaining privately held, which may give them more staying power to complete with bigger companies long-term. As ever, cloud security is still a concern to many.
Apparently, Microsoft’s customer loyalty is paying off in this stage, while AWS customers are having sticker-shock, and smaller players are trying to offer enterprise deals.
Despite the awarding of gold stars, Michael is still depressed often, and clings to the notion of purity of the public cloud.
Feature image by Luke Lefler.
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