Amazon Web Services Inc. (AWS), a long-standing leader in public cloud space, is now under attack from upstart challengers like Microsoft and Google. According to a recent financial analyst research report, Microsoft’s Azure cloud will be the main protagonist in the new year.
According to Business Insider, FBR Capital Markets predicted that Azure would see an annual run rate trajectory of more than $8Billion this year, according to an article. This number is similar to that reported by AWS in 2015.
FBR stated that 2016 will be a “206 area code street fight for the cloud”, with Microsoft best positioned to compete with AWS on enterprise cloud front for many years to come. We believe Microsoft and Azure have a lot of potential to cross-sell into large enterprise customers with a wide range of cloud offerings over the next few years. Given the positive feedback from the cloud community about solid uptake of key cloud products (e.g. Office 365, Azure), we believe 2016 will be its best cloud year.
Business Insider reported that Microsoft has a strong enterprise presence, giving it an advantage over Google and other competitors. Satya Nadella, the new CEO, is focusing on cloud computing.
Indeed, Microsoft last fall claimed Azure is actually bigger than AWS in terms of the number of regions in which the respective services operate, and also enjoyed an edge in hybrid and Platform-as-a-Service (PaaS) offerings.
When Mike Schutz, Microsoft’s general manager of cloud platform marketing, was asked how Microsoft differentiates Azure and AWS, Schutz made these claims at the Deutsche Bank 2015 Technology Conference.
Deutsche Bank backed the FBR report. Deutsche Bank’s own research note stated that Microsoft’s immediate goal is to increase Azure penetration, so that every Microsoft customer uses at least some Azure. Business Insider was quoted as saying. Although Microsoft is still at an earlier stage of its sales strategy, it has seen some success and claims that some customers have reached the’millions’ of dollars per year spending with Azure.
A report from RightScale Inc. last year showed that financial firms’ outlooks were in line with the report.
The survey report stated that AWS continues to be the leader in public cloud adoption with 57% of respondents running applications in AWS. This is up from 54% in 2014. This adoption rate is still 4x higher than the nearest competitor. Azure IaaS is now the clear No. The 2nd position has doubled from 6 percent in 2014, to 12 percent in 2015 in the survey.”