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Scoop: Google, Microsoft both targeting Amazon with new clouds

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Google (s goog) is hard at work on a cloud computing offering that will compete directly with the popular Amazon EC2 (s amzn) cloud, according to a source familiar with Google’s plans. Not to be outdone, other sources have confirmed Microsoft is also building an Infrastructure as a Service platform, and that the Redmond cloud will be ready — or at least announced — before Google’s. According to my sources, Google should roll out its service for renting virtual server instances by the end of the year, while Microsoft is slating its big announcement for a June 7 event in San Francisco.

Although Google declined to comment on whether the offering is indeed on the way, an IaaS cloud would make a lot of sense for the company. It already has a popular platform-as-a-service offering in App Engine that is essentially a cloud-based application runtime, but renting virtual servers in an IaaS model is still where the money is in cloud-based computing. Google also has an API-accessible storage offering — the aptly named Google Cloud Storage — that would make for a nice complement to an IaaS cloud, like Amazon’s ridiculously popular S3 storage service is for EC2.

Microsoft clearly got the message on where developers are spending in the cloud, too, which is why it’s reportedly expanding its Windows Azure cloud to compete with Amazon more directly than it already does. That means the ability to rent Windows and Linux virtual servers by the hour as well as, it has been reported, support for Java on the PaaS side of Azure. The speculation that Microsoft will make these moves at some point is nothing new, and tweets last week  from a Microsoft analyst saying “Infrastructure as a Service is on the roadmap” only stoked the flames.

We’ll no doubt hear a lot more about Microsoft’s plans at our Structure conference next month, when I sit down to talk Azure with Microsoft Server and Tools Business President Satya Nadella.

Google and Microsoft are two cloud providers that should have Amazon Web Services shaking a bit, in a way Rackspace (s rax) and the OpenStack haven’t yet been able to. Google and Microsoft both have the engineering chops to compete with AWS technically, and both have lots of experience dealing with both developers and large companies. More importantly, both seem willing and able to compete with AWS on price — a big advantage for AWS right now as its economies of scale allow it to regularly slash prices for its cloud computing services.

In terms of timing, this looks like a case of both companies realizing they got ahead of themselves and the market by centering their cloud computing plans around PaaS rather than IaaS. If Google really does roll out an IaaS offering, maybe it’s also a sign of its newfound maturity when it comes to rolling out new services that fit naturally into its existing business and that it can actually sell. Although AWS has a commanding lead in market share — estimates start at 50 percent and only go higher — there are still a lot of developers left to win over and even some opportunity to poach a few from AWS if Google and Microsoft can keep up in the innovation game.

Image courtesy of Shutterstock user James Thew.

10 Responses to “Scoop: Google, Microsoft both targeting Amazon with new clouds”

  1. DanaBlankenhorn

    I predict this means Amazon earnings compression, but maybe not in the way folks think. I expect higher Amazon profits along with a lower stock price.

  2. Paul Calento

    As Keith points out, the opportunity is in the ability to move between public and private clouds, at will, as part of a converged cloud / hybrid cloud structure. But there’s still lock-in. Will be interesting to see how these compare not only to Amazon, but the OpenStack challenge.

  3. davidcdean

    Always playing catch-up. Bezos’ ironfisted decree on the services strategy in 2002 was scary-genius, in a way I don’t think people really appreciate even today. That was a DECADE ago. It’s “eat your own dog food”, a brilliant way to streamline operations internally, and ridiculously accurate market forecasting, all in one move.

    Rumors surrounding his personality and leadership style may be accurate, but there’s no denying, the guy is brilliant.

    • Yep. Everyone was saying he was insane because he was not concentrating on the main business. I remember investors were flipping out. But, he understood where the future was and how it was a perfect fit for Amazon. Pure genius.

      • Eddie

        Keith, et al. This actually makes a lot of sense if one looks at the bigger picture: Bezos has a background that roots to quantitative finance in NYC (D.E. Shaw group). As much as Silicon Valley / Seattle-ites might not like to believe this, it was actually Enron who had initial aggressive plans to provide IaaS and cloud computing as a “utility” in the 1990s. Ergo, cloud computing as a utility was really got its mojo from the likes of Enron / finance!

  4. Reblogged this on Virtualized Geek and commented:
    This only makes since as Microsoft will be able to leverage the improvements in Hyper-V to provide a stronger back end for their own IaaS Cloud offering. If successful they could potential challenge VMWare (or VMLimited as they call it) in the private/public cloud strategy. The ability to move from a private Hyper-V cloud to a Microsoft hosted instance will be compelling.

    • Steve

      I am excited about this–give me IaaS with Hyper-V so I can use this as a DR solution for my exiting Hyper-V machines. Amazon’s approach is too obtuse and everyone else seems to be heavy into the VMWare solution.