- Amazon Web Services has the largest share of the public cloud market.
- However, Microsoft is catching up — not only in market share, but also by beating AWS to win the crucial $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract with the Pentagon.
- We talked to 13 executives at companies that partner with these cloud platforms for their take on the rivalry between the two, and whether Microsoft can win.
- The verdict: Amazon’s lead will be hard, but not impossible, to beat, they say. Even if Microsoft doesn’t topple AWS, they say, there’s still a bright future for it in a market that doesn’t necessarily want only one cloud to win.
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Amazon has the top spot when it comes to cloud market share, but Microsoft is presenting more of a threat than ever.
Amazon Web Services essentially invented the modern cloud computing market in the mid-’00s, and dominates it to this day. According to estimates from Gartner, AWS has 47.8% market share, with its position reinforced by new products in databases, AI, and other fields.
But Microsoft, the runner-up, is catching up, with its arsenal of long-time enterprise customers. Already, analysts say that AWS — which has historically prided itself on paying attention to customers, not competitors — is showing rare signs of becoming more reactive to Microsoft’s big moves.
Underscoring the mounting competition was Microsoft’s big surprise win of the Joint Enterprise Defense Infrastructure (JEDI) contract, a $10 billion deal to move the Department of Defense’s sensitive information onto the cloud. Amazon is currently challenging Microsoft’s win, and AWS CEO Andy Jassy has said the company feels the decision was “not adjudicated fairly” because of political interference.
Even technologically, Amazon appears to be chasing Microsoft in other areas: At its annual re:Invent conference this month, AWS announced that its Outposts product is now available — representing Amazon’s big push into hybrid cloud, a market in which Microsoft has long established itself. Likewise, AWS announced Amazon Braket, a new quantum computing service that helps it keep pace with similar efforts from Microsoft and Google.
Amid all of this, Amazon has only recently eased up on long-standing rules that actually prevent partners from mentioning terms like “multi-cloud,” which imply that there are other options out there than AWS.
With all this at play, we asked 13 executives at AWS partner companies about whether Microsoft has a chance of beating Amazon for the top cloud spot.
SEE ALSO: Amazon’s recent body language about its cloud business shows how seriously it’s taking Microsoft’s ‘aggressive front’
Panzura CEO Patrick Harr: ‘It’s going to be a big battle between the two.’
“We’ve seen pretty big uptick in Azure. They’re a very powerful channel and have a very powerful sales team. They have a very strong application base. With that opportunity we’ll see what happens in the future. It’s going to be a big battle between the two…Microsoft has a very strong [partner] program. That will certainly present an opportunity for them to continue to accelerate. I think Azure has started to invest very heavily on the partner side and bring the advantages they have to the downstream channel.”
Chadd Kenney, vice president and chief technologist of Clumio: ‘They’re attracting developers over.’
“I’d say that my perception is AWS has a much more developer friendly platform. Microsoft is doing well on traditional business applications. As businesses start to take on legacy applications, Microsoft will pick up a bit. One thing is, Azure is picking up a lot more new innovative services and they’re attracting developers over.”
Mike Maciag, CMO of Dynatrace: ‘I don’t think there will be a single winner.’
“What I do know is the world very rarely settles on one thing. I’ve seen Microsoft come up and Google come up. In customers we see a real desire to have flexibility of deployment…I think people want choice. Who wins the ultimate battle? I don’t think there will be a single winner.”
Benoit Dageville, cofounder and president of product at Snowflake: ‘The adoption of cloud had two different waves.’
“The adoption of cloud had two different waves. The early adopters were startups that went directly to cloud and became very big. Amazon benefited from that wave. Now everyone is moving to the cloud, including big enterprises. The second wave is benefiting Microsoft.”
Richard Dolan, CMO and co-founder of Effectual: ‘I don’t think’ Microsoft can win at this point.
“I don’t think so at this point. I think there are specific use cases that can be applicable. AWS has taken almost 50% of the cloud share. It’s hard to combat against that. Alibaba has beaten [Google]. It’s a very competitive market to get into. They’ll grow. Surpass? I don’t think they can at this point.”
Sahir Azam, chief product officer of MongoDB: ‘Microsoft still has a shot at it.’
“It’s hard to know what Microsoft’s cloud revenue is, versus the things that more directly compete with infrastructure. It’s very clear that Microsoft is #2. It’s our benefit to see multiple cloud providers. Whether they’ll be bigger than AWS, who knows. Microsoft still has a shot at it. I will add that since Google is reforming with Thomas Kurian, we’ve seen Google spike up in the market. If anything, the reality is that it will be a three cloud race versus a two cloud race.”
Peter Guagenti, CMO of MemSQL: ‘My money will be on one of the Chinese providers.’
“Microsoft has a solid chance of it. They built their business on supporting developers. My money will be on one of the Chinese providers before Microsoft and Google. They are innovating and being aggressive about entering new markets.”
Ratmir Timashev, cofounder and executive vice president of worldwide sales and marketing at Veeam: ‘It depends on the market segment.’
“I think Microsoft definitely has its own market. I don’t want to call it a niche because it’s not a niche. AWS has its own market, and Microsoft has its own market. For Veeam, from our customer base, it’s approximately 50/50. I know AWS has a bigger market share than Azure, but in our customer base, it’s 50/50. For our customers who are modernizing their data centers and use Windows, Azure is the most convenient. It depends on the market segment.”
Trend Micro CEO and cofounder Eva Chen: ‘It’s gravity that might drag them down.’
“AWS is really good with new startups that are born in the cloud. Lots of those enterprises just started and need to catch up. They’re not born from the cloud. Both Amazon and Microsoft need to pay more attention to this…Whoever can serve this wave of customers will be better off. Of course, Microsoft has better customers on this side. It’s gravity that might drag them down. AWS does need to be more careful about Azure.”
Tolga Tarhan, CTO of Onica: ‘AWS is so far ahead in their service portfolio.’
“Maybe I’m biased. I think all the hyper-scalers have their benefits. AWS is so far ahead in their service portfolio. The mindshare they have among developers is a huge asset. I think the three big guys will do well, but the lead that AWS has will stay.”
Ofer Bengal, CEO and cofounder of Redis Labs: ‘If they play their cards right, they can.’
“In a way, if they play their cards right, they can. They are big enough to do tons of stuff like AWS. They are in the enterprise world and have been selling to big enterprises for years. In that way, AWS is behind. Microsoft is in the enterprise world. They have contracts and agreements in place. If they work hard and continue to do the right thing, they have a chance…They were able to change the market perception and people’s perception of the company as the big guys destroying everyone. Now, this is AWS.”
Doug Hanna, COO of Grafana Labs: ‘It’s definitely a competitive market with Amazon.’
“I think AWS has a really large head start, with the level of scale and market penetration they have…Companies are intentionally taking a multi-cloud strategy because of pricing pressure. It’s definitely a competitive market with Amazon.”
Armon Dadgar, cofounder and CTO of HashiCorp: ‘The market doesn’t want one cloud to win.’
“My guess is what happens is you see a relatively easy split. You see Microsoft catching up aggressively. That being said, AWS isn’t resting. They’re growing their sales team really fast. Amazon is intent on not losing market share, while Microsoft has relationships with everyone. If you play this out five to six years from now it starts to look like the server market, like Dell and HP. No one wins. I don’t think we’ll see a situation where one cloud provider is 70%…The market doesn’t want one cloud to win and the market will always get whatever it wants.”
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