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With Amazon, Google and Microsoft in the mix, can anyone else contend in public cloud?

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If you ask Microsoft EVP Scott Guthrie who the players are in public, “massive-scale” cloud, he listsAmazon Web Services, Google and (surprise!) Microsoft. That appears to be the general consensus (though IBM would add IBM to that list, HP would add HP, and so on). The thinking is that massive scale requires super-massive investment and if vendor A hasn’t already poured $4 billion to $5 billion into cloud infrastructure, it’s over.

What I take away from that is when vendor A makes a big deal about putting $1 billion (or $1.2 billion) in cloud infrastructure at this point, it’s too little too late. With [company]Amazon[/company], [company]Google[/company] and [company]Microsoft[/company] sucking the air out of the room, can anyone else compete in public cloud?

The answer is — sort of. For startups with a clean slate, AWS has been the IT infrastructure of choice for a long time, but it’s starting to see competition. Microsoft CEO Satya Nadella claims that 40 percent of Azure revenue comes from startups and ISVs —  a stat that would be a lot more impressive without the ISV component. Startups tend to be Linux- and Mac-oriented, so if Microsoft could claim a big chunk of business from them, that would really be something.  (On its earnings call Thursday, Microsoft said cloud-related revenue, including that from Azure and Office 365, was up 125 percent year over year to about $1.18 billion.)

Microsoft CEO Satya Nadella speaks at a Microsoft Cloud event. Photo by Jonathan Vanian/Gigaom
Microsoft CEO Satya Nadella speaks at a Microsoft Cloud event. Photo by Jonathan Vanian/Gigaom

Google likewise has attracted (and bought) a range of startup workloads. The question most have is whether Google really wants to win enterprise workloads, but more on the enterprise later.

IBM SoftLayer is wooing startups as well with Silicon Valley events, aggressive pricing and free networking, but IBM, which just came off its tenth consecutive bad quarter, has a lot of macro problems that could give buyers pause. HP? Now that it’s launched its OpenStack Helion release, if the buyer wants to go OpenStack hybrid, it may be a good choice.

Zillion-dollar question: Who wins the enterprise?

In that huge demographic of older, established businesses with existing in-house infrastructure, there is a lot of nuance. Many of these companies will likely look to the public cloud that best mirrors what they already run. So [company]VMware[/company] shops might look at vCloud Air, Microsoft shops at Azure, [company]IBM[/company] sites at IBM SoftLayer and so on. The problem is that many of these big companies use products from all these vendors and so will have to decide which of those clouds best suits its needs.

Todd Ryan, architect lead at Kent State University, said he’s keeping an eye on IBM and VMware. “Niche features could capture some of the enterprise market,” he said via Twitter. But “for SMB market? No chance.”

Neither AWS, Google or Microsoft are probably on the radar for companies that run a ton of virtual machines (VMs) in house, said Joe Emison, CTO of BuildFax, a big AWS user and cloud watcher. They might be more interested in providers like IBM, [company]CenturyLink[/company], [company]Datapipe[/company] and the various telcos — all of which field public cloud options. And if the buyer has an existing relationship with a systems integrator, whatever that integrator recommends will probably get a look.


Lance Crosby CEO of IBM's SoftLayer business.
Lance Crosby CEO of IBM’s SoftLayer business.

IBM SoftLayer and [company]Rackspace[/company] offer fast bare metal capabilities that others players lack, but it’s unclear how much traction they’ve gotten.

“Performance-wise, bare metal is up there — although not with as much differentiation vs. AWS and Google as you might expect,” Emison said via email. Bare metal is also attractive from a security standpoint. But, he noted, “most people architecting for cloud embrace horizontal scaling, and to do that right you don’t really need better performance than you can get from VMs.”

Still, AWS the pioneer of public cloud is not standing still. It’s adding new enterprise friendly perks, including new AWS Directory Services that aim to ease the management of environments that mix on-premises Microsoft applications and AWS cloud resources.

4 Responses to “With Amazon, Google and Microsoft in the mix, can anyone else contend in public cloud?”

  1. Isn’t there really no market for smal and midium enterprises? From other perspectives I think other enterprises can provide better services and functions based on their requests. For example, Madhouse Tech, its cloud product Ballloon can save file to given folders in cloud storage very fast.

  2. Isuru Wimalasundera

    The post raises some good questions about current stand of cloud space. In the perspective of finance, resources, functionality and credibility it is true that cloud titans such as AWS, Google and Microsoft has dominated the space. But from the perspective of specialization I personally believe that other vendors also would have a chance based on the service they specialized about since they are willing to provide more productivity and capability over that domain only. For an instance WSO2 provides a complete stack of products to cater SOA based enterprise development, their cloud offering WSO2 Cloud (Beta) at is an attempt of bringing those SOA facilities in to the Cloud space for cloud based enterprise development. WSO2 Cloud (Beta) up to date only supports Application (J2EE, Data Services, JAXRS, JAXWS) and API management, but soon will be powered with integration , security and IoT (device management) cloud facilities.

  3. Edward Sabo

    Now, that’s an interesting article with some good questions. I think there are some competitors to Amazon’s and Google’s public clouds which worths to be mentioned, each of them treating specific needs. The market will go on big data crunched by bare metal for achieving successes. I’ve recently read about Bigstep’s full metal cloud, they claims a good performance over their bare metal infrastructure. I think that Google and IBM will serve to more generics situations that the others public cloud providers who tend to get more specialized on crunching big data fast and being concern about performance.

  4. Rich Hintz

    Telcos with cloud offerings won’t make much headway until they use a sales force that wants to sell and knows how to sell cloud services instead of their dream of selling high margin MPLS links to repurposed data centers originally built in 1902 with power densities of 3kw/rack.

    And why wouldn’t AWS, Google, or Azure be credible for enterprises that run a lot of VMs in house, as Joe Emison says? The logic isn’t at all clear.

    Investing time and effort in bare metal today seems like an exercise in engineering in technical debt. Security issues for non-bare metal configs seem like FUD these days. Performance differentiation isn’t significant, as the article mentions, and goes away when you think of the latency to spin up a new bare metal machine, if one fails.

    And what are the “niche features [to] capture some of the enterprise market”? Higher layers than compute, storage, networking? More context for this would be helpful.