- Having invented the cloud, it now wants to seriously catch up
- Has engineering pedigree but needs to speak C-suite language
ANALYSIS: A NEW study from Synergy Research Group suggests that the public cloud computing world is heating up, with all the world’s top vendors having seen tremendous growth in 2015.
According to Synergy Research, Microsoft Corp’s growth was the largest at 124% in the fourth quarter of 2015, compared with the corresponding period in 2014. Second place fell to Google which grew 108%, followed by Amazon Web Services Inc (68%); IBM SoftLayer (57%); and Salesforce.com Inc (40%).
In terms of 2015 global market share, Amazon Web Services (AWS) still led at 31%, followed by Microsoft (9%), IBM SoftLayer (7%), Google (4%), and Salesforce (4%).
“The big four cloud operators are continuing to run away with the market,” said Synergy Research Group chief analyst John Dinsdale.
“The second tier of operators are either niche players, generalist IT service providers, or companies lacking the scale, focus and investment capabilities required to truly challenge the top four hyperscale cloud providers,” he added.
Other research firms such as Gartner, Forrester and IDC have different methodologies and may rank the top players differently, but what isn’t in doubt is that these names consistently appear as the cloud forces to be reckoned with.
All of the top players have consistently shown growth, but they are not equal, with different strengths and weaknesses.
The main players
AWS is by far the leader in the public cloud computing space. Beginning life as far back as 2006, it was the first that really had the vision to make computing services ‘rentable’ in the true sense of the word.
While the then top three most successful IT players – IBM Corp, Oracle Corp, and SAP SE – were still raking in billions in revenue, AWS quietly went about changing the paradigm of computing and began the cloud revolution.
IBM and SAP were slow to embrace the cloud, whilst Oracle was not only slow to embrace it but also publicly poured scorn on the notion of a public cloud, and only in 2012 made serious attempts to provide such services to its enterprise customers.
Over the years, Seattle, Washington-based AWS has invested billions of dollars into its people, infrastructure, and marketing. The company has consistently innovated in terms of feature sets and cost savings.
For instance, it introduced a new set of services on April 19, and over the span of its 10-year existence, has cut prices 51 times – although rival Google argues that these price cuts have catches to them.
Microsoft officially entered the cloud game only in 2010, arguably a little late to the market, but it has quickly scaled up and made gains over the last couple of years under the tutelage of its current chief executive officer Satya Nadella (pic).
The Redmond, Washington-based giant’s greatest advantage is that it understands enterprise businesses more than most, and knows how to serve large customers’ needs. It also has deep roots in its channel and partner ecosystem, albeit not that strong in the cloud space.
That said, it has diverted considerable resources into its cloud intelligent group, which runs its Microsoft Azure platform, in the past few years. This business has been steadily growing and captured about US$6 billion in revenue and about 20 million subscribers to its hugely popular Office 365 cloud productivity suite.
The company however still faces challenges as its latest earnings missed Wall Street’s targets, but it is firmly the No 2 player.
IBM SoftLayer came into being in 2013 via IBM’s acquisition of webhosting player SoftLayer Technologies Inc. – a defensive move by Big Blue designed in part to help it ramp up its cloud services. It has made up some ground since.
SoftLayer appealed to IBM simply because it boasted the ability to deploy public cloud offerings in a private cloud setting – what is known as ‘bare-metal’ cloud. This means that companies could have the elasticity and cost savings of the public cloud, while still getting the security and privacy of the private cloud.
This sat well with the Armonk, New York-based computing giant, which had many traditional enterprise customers that would prefer this paradigm instead of accepting an all-out public cloud player like AWS.
The challenge however is that IBM SoftLayer has little to differentiate itself beyond the hybrid blending of virtualised and bare-metal capabilities and its broader geographic presence, according to Gartner.
Also, SoftLayer has historically been strongly focused on self-service dedicated hosting for small- and medium businesses, and it is missing many of the Infrastructure-as-a-Service (IaaS) capabilities desired by enterprise customers.
Customers report that SoftLayer services still feel like a small-business experience, particularly with regard to the portal, sales and support, according to Gartner.
Next Page: Where does Google stand in all of this?