47 Comments

Summary:

Amazon Web Services is indisputably the largest cloud service provider by far, and by all accounts. So what rivals could be No. 2 and maybe even give AWS a run for its money? Some of these names might surprise you.

6722296855_c81c6c26bc_z (2)

Amazon Web Services is, by all accounts, the largest cloud service provider by far, although good luck finding third-party numbers to verify that. Amazon, like most of the big cloud providers, doesn’t disclose much about current or planned data centers.

New research from Accenture analyst Huan Liu estimates that Amazon’s Elastic Compute Cloud (EC2) runs on a whopping 450,000 servers. Amazon does not break out AWS revenue, but some say it could already be a billion dollar business.

So, stipulating AWS as No. 1, here are seven cloud rivals that could give it a run for its money over the next few years.

1: Rackspace:  While Rackspace encompasses managed services and pure hosting businesses, it’s also a major cloud provider with actual, paying customers.  Measuring by revenue and VMs, Rackspace currently has a lock on the No. 2 slot by a wide margin, said Gartner analyst Lydia Leong. As one data point, Rackspace public cloud revenue rose to $189 million in fiscal year 2011, up from $100M the previous year. Going forward, that business should only grow as Rackspace brings more OpenStack implementations online.

2: Google:  If you’re talking number of physical servers, Google could already be the biggest cloud player. As for paying customers? That’s harder to discern. Google is one of the few companies that can (and does) invest in the pure computing firepower to contend with AWS. If you count all that Google Apps and Gmail storage, then Google’s obviously a huge player. The Google App Engine platform-as-a-service is still around but isn’t a factor for business developers.

3: Microsoft:  Two-year-old Windows Azure has big capacity, but actual traction is unclear — but it is clear Microsoft is going for the gusto. Microsoft just launched an Azure-focused startup accelerator in Israel to help boost demand. Next week, it is expected to announce timing for the first of its ERP products — actually the first of any of its major products — to run on Azure. And, going forward, Microsoft Azure’s embrace of Hadoop could attract more of the next-generation big-data workloads that the cloud vendors compete for.

4: IBM:  IBM SmartCloud is coming up fast on AWS and Rackspace even now, according to one cloud storage expert. That news surprised me but probably shouldn’t have, given IBM’s size and resources. And face it: IBM knows data centers. Like Microsoft, it is bringing Hadoop into its cloud with its InfoSphere BigInsights service.

5: Hewlett-Packard:  HP’s been all over the map on cloud plans, promising an Azure-based implementation a few years ago that has gone nowhere and more recently standing up an OpenStack-based public cloud. Zorawar “Biri” Singh, SVP for HP cloud services, told the New York Times last week that HP’s cloud will add features and capabilities beyond what AWS provides.  HP has also said it wants to challenge AWS for the hearts and minds of cloud developers. HP has had its share of woes lately, but it’s still a tech power, and provided the cloud is a priority with new management, it would be hard to rule out.

6: VMware: VMware’s vCloud already runs a ton of clouds for third-party providers, and the company’s Cloud Foundry platform-as-a-service is gaining traction. All of that plus the Mozy cloud storage service, which VMware manages for parent EMC, means that the company — which dominates server virtualization inside the firewall — is gaining a pretty impressive toehold in the cloud beyond as well.

7: Facebook: Don’t laugh. It’s a wildcard, but Facebook is putting serious sweat into data centers. And it’s applying lessons learned to the Open Compute Project, which aims to apply open source development to hardware design. With more than 800 million users, Facebook knows a thing or two about cloud infrastructure. True, Facebook doesn’t offer cloud services now, but then again, Amazon used to just sell books. Facebook could evolve into many things. GigaOM’s Derrick Harris has already suggested that Facebook could be your next software vendor.

Scrappy competitors could make a play, but…

“To compete with AWS you would need three things: Billions to invest, the wherewithal to manage technology on a massive scale and freedom from legacy constraints. Google and Microsoft surely have the money as well as the technology chops, but both are constrained by commitments to their valuable core businesses. Who might come in to compete out of the blue? Maybe Facebook, if they were looking for another line of business,” said Robert Shear, president of Greystone Solutions, a Boston consultancy that uses AWS for most of its development and deployment work. “My guess is that AWS will keep on growing until they bump up against anti-trust limitations in the US and the EU.”

So there you have it: seven contenders who could duke it out for the No. 2 spot in cloud services over time — and maybe even battle AWS for the top spot. Who am I missing here?

Photo courtesy of Flickr user IntelFreePress.

  1. Okay, i’ve already heard that Joyent and Softlayer should have been included. Who else?

    Share
    1. You left out the carriers – Verizon Terremark, Century Link Savvis, AT&T, etc.

      Share
  2. Nirvanix has the lead in enterprise cloud storage, and they should be on the list.

    Share
  3. Nirvanix has several multi-petabyte wins in cloud storage.

    Share
    1. Nirvanix! another good choice!

      Share
  4. What about Terremark or Savvis?

    Share
  5. Reblogged this on mamamiasnzpiers.

    Share
  6. GoGrid

    Share
  7. Every Cloud provider named on this list primarily provides a commoditized public cloud services either in either IaaS & PaaS – that’s about it. Neither AWS, RS, Google, MS have a true Enterprise grade Cloud offering geared towards the Enterprise security & data conscious customer. Why do you think Amazon, Racksapce & MS reduced their Cloud pricing packages last week? The true Enterprise grade Cloud offerings that the service providers embrace with their Global Network presence, Federal grade compliance & security features, Worldclass Datacenter facilities, are what todays business customers want to learn more about. At this level i would consider Verizon Terremark No1, with AT&T, Centurytel (Savvis) closely behind, they clearly dictate the future of the business cloud market.

    Share
    1. Derrick Harris Wednesday, March 14, 2012

      I don’t know how big any given enterprise cloud can scale. The deals will be bigger and the workloads will arguably be more mission-critical, but more hoops to jump through and more money will keep smaller developers away, especially as Amazon and Microsoft keep working on new enterprise features.

      Share
    2. Vince Mayfield Thursday, March 15, 2012

      I do not know how you make the state “Neither AWS, RS, Google, MS have a true Enterprise grade Cloud offering geared towards the Enterprise security & data conscious customer.” I don’t know what is more enterprise grade than this http://www.microsoft.com/en-us/showcase/details.aspx?uuid=39836de6-cd61-4e16-8b84-2f8f8c3b671c On what facts to you base your opinion. Amazon & Microsoft have ISO 27001, FISMA, SafeHarbor, and PCI Compliance / Certifications. Just because it is Public Cloud does not make it unsecure or mean the data is not secure. Microsoft’s offering scales horizontally.

      Share
  8. Derrick Harris Wednesday, March 14, 2012

    I think the list is good considering being No. 2 will require a sizable operation and general-purpose services. Everyone here has their own data centers and some good options for developers and enterprise workloads. Although, Dell might become competitive given its plans for VMware, OpenStack and Windows Azure clouds.

    Share
    1. Atul K Chhabra Wednesday, March 14, 2012

      Derrick, Barb,

      While this article is certainly provocative (as intended,) it looks at the scale of cloud offerings from the limited perspective of more SMB users, more servers, and PaaS & SaaS offerings.
      A different perspective can be found in the recent Gartner Magic Quadrant for Public Cloud Infrastructure as a Service. Besides Amazon, none of the players listed here figures in the leaders quadrant. For enterprises, cloud provides efficiency and agility. But they also care deeply about Quality of Service, Service Level Agreements, security attestations, and hybrid cloud offerings.

      This is not to minimize the innovations driven by Amazon, Facebook, and Google. They are constantly pushing the envelope on web-scale / warehouse-scale computing and forcing the carriers / managed service providers to take note.

      The article could use a little more enterprise perspective.

      Share
      1. Derrick Harris Thursday, March 15, 2012

        Atul,

        If we look at the cloud market like the mobile market, AWS is iOS, and OpenStack is Android. Microsoft is Windows Phone (duh). I don’t know what VMware is. I’d say Nokia, but it’s too big. While AWS will probably have the single-largest footprint, it will be all the OpenStack clouds in aggregate that probably have the greatest number of customers. That probably makes Rackspace Samsung, right?

        I see enterprise clouds with their own tech platforms being RIM. Clearly the best choice for certain workloads, and able to do very, very well if they actually execute to keep up with the times. I think VMware fits in here too, but without analogy as it’s an enterprise-class platform.

        Share
  9. Its very simple… VMware is the biggest Cloud provider. If you include both the Public and Private Cloud business, VMware has the largest footprint hands down.

    Share
    1. agreed. vmware is well positioned… but cloud is more than virtualization and xen seems to have some momentum, no?

      Share
      1. Yes, cloud is more than virtualization, and so is VMware. But cloud is nothing *without* virtualization, and being the market innovator there means they don’t have to waste time getting it right, unlike Microsoft, whose virtualization is VMware circa 2008, maybe 2009 if you’re generous.

        Share
  10. i love this quote! ““To compete with AWS you would need three things: Billions to invest, the wherewithal to manage technology on a massive scale and freedom from legacy constraints.” there are only two people that describes. hp and ibm.

    Share
    1. Jash

      I would say yes to IBM. Not so much to HP.

      Share
    2. Andrew Brabban Thursday, March 15, 2012

      Also Fujitsu – 3rd largest global IT services provider investing $1Bn per annum in cloud

      Share
      1. andrew, do you see companies considering multiple clouds to hedge their bets given recent outages?

        Share
      2. Andrew Brabban Sunday, March 18, 2012

        Barb, I see companies wanting hybrid solutions spanning clouds and legacy to deliver reliably and securely (e.g. Keeping data on premise)

        Share
    3. i would think both ibm and hp have considerable legacy constraints.

      Share
      1. Bad article. There should have been companies from Gartner’s Magic Q, the leaders in your article. SAVVIS, Terremark, the other ones are a joke, accept Rackspace.

        Share
  11. You missed out Fujitsu – they are now huge in Cloud Globally, mainly pushed from the UK capability.

    Share
  12. Connectria has a good cloud offering as well with a lot more flexibility than AWS

    Share
  13. I don’t see how HP, a high margin business, is going to compete in the low margin IaaS space based on a free cloud OS – OpenStack. And this idea that enterprise customers will come just because it is HP is a joke. Enterprise customers know all to well that HP lost its way several years ago and has not recovered. And since the Web OS fiasco, HP has zero cred with developers so convincing them that it is serious about PaaS is going to be very hard.

    Share
    1. Jonathan Brown Thursday, March 15, 2012

      Yes, I think that HP might be smoking a little something in their pipe. IBM on the other hand – They are the ones to watch. I could easily see them with the 20% of the market that represents the part with high margins. They know how to sell services with compute attached (and are taking an application lifecycle management approach with their PaaS offering – integrating existing tools with the new platform) and that’s really what it’s going to take to win the long battle. Or, it’s somebody we’ve never heard of….

      Share
  14. FracRack LLC in St. Louis is the best Cloud provider that you have never heard of. http://www.fracrack.com No big names, no multiple datacenters just an exceptional TRUE (IAAS) offering.

    Share
  15. and what about Salesforce ($ 2.3 billion cloud business)?!!!

    Share
  16. This post is a little confusing…we are talking about Infrastructure as a Service providers, not cloud service providers. salesforce.com is a “cloud service provider” and eclipses all of these guys in customers/revenue.

    Share
  17. 450,000 servers and “almost a billion dollars” revenue… something doesn’t jive. Does that mean that they make 2.2K/year revenue per server… that barely covers amortization…

    I am willing to bet that the estimates are over by at least 10x as far as the number of nodes

    Share
    1. Could be talking vms and not physical?

      Share
      1. the accenture analyst was referring to physical (blade) servers.
        http://huanliu.wordpress.com/2012/03/13/amazon-data-center-size/

        Share
  18. Verizon\Terremark is not mentioned. This makes this article skewed and not credible.

    Share
  19. what about:
    — Salesfore interesting player with the force platform – an early cloud player
    — SAP as they are the largest ERP vendor. Often not early in the game but successful – remember CRM…
    — Oracle with the full cloud ready stack

    Share
  20. Maybe this is naive, but how is Apple’s iCloud not here? By 2015 smartphone will be 100% US penetration, tablets 50%—and by all accounts 1/3-1/2+ of both of these markets will be iPhones + iPads running iCloud. What am I missing?

    Share
    1. Vince Mayfield Thursday, March 15, 2012

      That is because Apple does not have a Cloud of their own. Apple’s iCloud runs on Microsoft’s Cloud – Windows Azure and Amazon’s AWS – This is old news. – http://www.theregister.co.uk/2011/09/02/icloud_runs_on_microsoft_azure_and_amazon

      Share
      1. Bah. Even the article you cite has:
        “That said, Apple could be biding its time in using Microsoft and Amazon.

        Apple is building a $500m data centre in North Carolina. If reports of the hardware going in there are correct, the centre’s data capacity should run into tens of petabytes and be more than suited to running iCloud – for now, at least.”

        Share
  21. Vince Mayfield Thursday, March 15, 2012

    I am curious what data did you use to come up with your rankings that put Amazon #1 and with what criteria did you evaluate?

    Share
    1. as i said in the article, real #s are scarce from AWS, however if you do look at what’s available — in terms of objects stored and other factors — and talking to dozens of vendors/analysts etc., no one (including the other vendors) suggested any one is larger than AWS in cloud. Here are some #s i took into consideration: http://aws.typepad.com/aws/2012/01/amazon-s3-growth-for-2011-now-762-billion-objects.html
      Revenue #s compiled last spring by Tier1 have AWS at #1 with estimated $525B in revenue , force.com #2 w/ $135M and rackspace #3 with $48M. If you know of other estimates I’d love to see them.
      thanks for the comment.

      Share
  22. David Sawatzke Thursday, March 15, 2012

    OpSource a Dimension Data Company – http://www.opsource.net/

    Share
  23. Somebody up the list said that Gartner Magic Quandrant companies should be on here, I literally LOLed. How about no. their Cloud Q has about the same relation to reality as Friendship is Magic. Yeah, ponies. I went there.

    Share
  24. What do you say to Apple? Billions to invest, check. Massive cloud storage presence already, check. Edge buildout, check… 1E+08s of nudge-able userbase, check

    Share
  25. Robert Jenkins Wednesday, March 28, 2012

    Barb, this is a very thoughtful piece highlighting the importance of competition in the cloud space. However, there are definitely some key players missing. For example, CloudSigma has built a cloud IaaS offering with unprecedented flexibility that isn’t tethered to the deployment and resource constraints of the Amazons in the market. Our company provides a truly dynamic public cloud by offering a utility style, pay-as-you-go pricing model, open software layers and complete data portability. We don’t restrict our customers’ control over their cloud deployments, and we’re effectively demonstrating that customizability can be a defining feature of IaaS platforms. This kind of innovation is what will really propel the cloud forward and give Amazon a serious run for its money.

    Share
  26. Tom Laszewski Sunday, May 20, 2012

    Verizon/Terremark, Century Link/Savvis, and AT&T are all big ones as mentioned by Atul. CSC and HP/EDS run some of the biggest data centers in the world, and are starting to host public/private cloud for companies.

    Share

Comments have been disabled for this post