Tag Archives: aws

The Enterprise Public Cloud Wars Are Over. Let’s Talk About What’s Next


Last week there were some very interesting developments in the public cloud space. First, Microsoft, Amazon beat Wall Street expectations and reported monster numbers associated with their public cloud offerings.

Also, HP announced that it will be stopping the efforts about the Helion public cloud to focus on the private and hybrid cloud offerings. These news come after two years of sustained efforts and large investments in their public cloud platform.

These new developments has made many questioned whether the enterprise public cloud race is essentially over. While the public cloud space remains really competitive within a few platforms, it’s pretty obvious that we can already identify winners in the enterprise public cloud space.

And the Winners Are….

Amazon and Microsoft by a mile with Google, Salesforce and IBM being relevant second places. Amazon’s AWS and Microsoft’s Azure have managed to develop the most complete offerings in the enterprise public cloud space. Today, AWS and Azure not only provide a larger of number of capabilities than their competitors but also more complete offerings enterprise-ready areas such as security, compliance etc.

Playing the Innovator’s Dilemma

If we apply Clayton M. Christensen’s innovator dilemma thesis to the enterprise public cloud space we need to assume that, at some point, a new generation of startups will challenge the well-established enterprise public cloud platforms. However, looking at the near future, it’s hard to imagine what factors will be able to disrupt the lead established by the enterprise public cloud incumbents. In principle, a new entrant in the enterprise public cloud space can try to establish traction by disrupting some of the following areas:

  • Technology Capabilities: The simplest way to disrupt the enterprise public cloud space will be with a new offer that provides a richer feature set than the existing incumbents.
  • Pricing: Price is always an interesting factor to facilitate adoption for a new entrant in the enterprise public cloud space.
  • Developer Community: Developers have proven that they can drive the adoption of cloud technologies in the enterprise
  • Adoption within Enterprise Software Startups: A cloud platform that gets adopted by new enterprise software startups can become increasingly relevant customers of those startups.
  • Traction in Specific Geographies: Conceivably, a new enterprise cloud platform can gain traction within a specific geographic location.
  • New Distribution Channels: If a new public cloud platform can tap into distribution channels untapped by the incumbents in the space, it can become relevant in the enterprise.

However, after analyzing the current state of the enterprise public cloud platform market, its hard to imagine how any of those factors can be relevant enough for a new entrant to cause disruption in the space. Let’s explore that analysis.

Technology Innovation

From the enterprise capability standpoint, the Azure and AWS cloud are far ahead of every other platform in the space. Ranging from basic infrastructure to sophisticated capabilities such as machine learning or integration, both Azure and AWS are providing native services for every imaginable capability that can be relevant in the enterprise. Salesforce, IBM and Google are also rapidly growing the feature set of their public cloud offerings. In that sense, it’s hard to conceive a new enterprise public cloud platform that will be able to compete with the incumbents in the short term.


The enterprise public cloud offering is a race down to 0. Amazon, Microsoft and Google keep lowering the price of their offering in order to not allow any other vendor to gain competitive advantage. In that sense, it will be incredibly difficult for a new enterprise public cloud offering to disrupt the space with a more attractive pricing model.

Developer Community

AWS, Azure, Heroku and Google Cloud are some of the examples of enterprise public cloud platforms that are enjoying growing developer communities. By leveraging and embracing open source technologies, incumbents have been able to attract millions of developers actively building applications in their platforms. As a result, new platforms in the space will have to build similar developer communities to even be competitive with the incumbents.

Enterprise Software Startups

Another element that seems to be a non-factor. Platforms like AWS, Azure and Google Cloud have not only become dominant offers for large enterprises but they have captured the hearts of new enterprise software startups that keep relying on those platforms to power their offerings. Those startups represent a new and vibrant distribution channels for the adoption of the incumbent platforms and will make it extremely hard for a new offering in the space to leverage that channel.

Geographical Presence

Platforms like AWS and Azure have developed an incredibly impressive global footprint with locations that offer viable options in almost every country in the world. Additionally, the services provided by those platforms are available in a large number of languages. This factor makes it almost impossible for new entrants to develop a relevant presence in specific geographies.

New Distribution Channels

The dominant enterprise public cloud platforms have played a masterful game developing a large number of distribution channels from partner networks to whitelabel offerings. The network effects of these channels will make it extremely hard to new offerings to disrupt the enterprise public cloud space by developing new distribution channels.

Let’s Focus on Private and Hybrid Clouds

With the competition in the enterprise public cloud space almost over, the attention has shifted to private and hybrid cloud platforms. Currently, that space remains overly competitive with platforms like Pivotal’s Cloudfoundry, HP Helion, Aprenda and even public cloud incumbents like Azure and AWS trying to create comprehensive offers for enterprises. That will be the subject of a future post.

Leave a comment

Posted by on November 6, 2015 in Uncategorized


Tags: , , , , , ,

Microsoft and Amazon Earning Reports: Two Perspectives of the Cloud

aws-windows azureYesterday, both Amazon and Microsoft beat Wall Street expectations during their quarterly earnings reports. While reading many of the analysts’ reports during the evening, I couldn’t avoid noticing some key differences in the way their cloud services businesses is evolving. If is true that both companies reported very strong numbers in their cloud services business, it’s pretty clear that their current challenges and go to market strategies are quite different.

AWS: It’s Growing but not as Fast as It Was

As expected, Amazon’s AWS business continues to grow strong. For the fourth quarter, the North America Sales “Other” category — which includes AWS — hit $1.17 billion, up 52 percent from $769 million for the year-ago quarter. For the full year, AWS (or other) hit $3.72 billion, up 58 percent from $2.35 billion.


An interesting thing to notice is that, while AWS remains the clear market leader in the cloud infrastructure category, the AWS business is not growing as fast as it was a few years ago. The following chart might help to illustrate that point:


Some factors that might influence that could be the constant cost reductions in some of the services and the increasing competition from Google, Microsoft, Rackspace and others.

Microsoft: Diversity of Cloud Services Offerings

Microsoft also delivered killer numbers as part of it’s earning reports yesterday beating Wall Street expectations.

microsoft earnings


140424MicrosoftQ32014Earnings (1)

One thing to notice in MSFT report is that it’s long term investment in diverse cloud services offerings is starting to pay off. Office365 delivered a 100% growth and is now on a $2.5B. Similarly, Windows Azure revenue increased by 150%. Finally, Bing US market share is up to 18.6%

While these numbers are just based on one quarterly report, it might be an indication of two different strategies moving forward. While AWS needs to figure out new engines of growth to continue its market dominance, Microsoft will continue diversifying its cloud offering to accelerate growth.

Interesting times…

Leave a comment

Posted by on April 25, 2014 in Uncategorized


Tags: , , , ,


Get every new post delivered to your Inbox.

Join 65 other followers