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7/28/2014
12:16 PM
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Microsoft, IBM Gain On Amazon Cloud

Synergy Research Group data shows Microsoft and IBM are gaining cloud services marketshare while Google is falling off the pace.

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Amazon Web Services "finally has some tough competition to face." That's the assessment Synergy Research Group chief analyst and research director John Dinsdale offered on Monday along with fresh, second-quarter cloud revenue data for AWS and competitors Microsoft, IBM, Google, and Salesforce.com.

The upshot of Synergy's analysis is that Microsoft and IBM are growing faster than AWS, with 164% and 86% revenue growth rates over the past year, respectively. Google, meanwhile, fell short of Amazon's 49% year-on-year growth rate with an increase of 47%.

“Until this quarter, [AWS] could claim that it was bigger than its four nearest competitors, but now at least one jewel has fallen from its crown," stated Dinsdale.

[Is the Amazon-Google price war killing their revenue growth? Read Amazon's Bruising Week.]

It should be noted that Synergy's definition of cloud infrastructure service revenues includes infrastructure-as-a-services (IaaS), platform as a service (PaaS), and private and hybrid cloud services, so it's not exactly an apples-to-apples comparison.

Synergy distinguished that Microsoft "is making some huge strides in IaaS and PaaS" while IBM has "clear leadership" in the private and hybrid infrastructure services. In recent quarters IBM has committed more than $2 billion into expanding SoftLayer data center capacity, which should fuel future revenue growth. Salesforce.com focuses on PaaS (rather than IaaS) with its Force.com and Heroku offerings, but gets most of cloud revenue from the software-as-a-service category.

Amazon "remains in a league of its own," noted Synergy, with revenues in excess of $1 billion per quarter, nearly all of it coming from IaaS. Quarterly cloud infrastructure service revenues have reached $3.7 billion, Synergy estimates, with trailing twelve-month revenues exceeding $13 billion.

The nature of pay-as-you-go makes the cost calculation seem easy. It's not -- but it is more critical than ever. Get the new Cloud ROI issue of InformationWeek Tech Digest today (free registration required).

Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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Lorna Garey
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Lorna Garey,
User Rank: Author
7/29/2014 | 10:12:48 AM
Re: Hard to compare cloud revenues to clloud revenues
Exactly Charlie -- just ask Apple and its trumpeting of OS X gains in enterprise. Twenty percent quarterly jumps sound good until you realize that's up from 3%.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/28/2014 | 8:22:33 PM
Hard to compare cloud revenues to clloud revenues
I'm wary of IBM's percentage gains. IBM is so interested in putting out big figures -- $1 billion here, $2 billion there -- as impressionistic PR gains that I wonder whether it's accounting for its revenues in the same way as it did in the second quarter of the prior year. In the third quarter of 2013, Synergy's headline was, "IBM, Microsoft and Google Make Little Headway Against Amazon..." If there's been an amazing turnaround in the last 3 months, let's see what the base figure was for calculating IBM's percentage of growth. How did it compare to Amazon's base? It's much easier to show rapid growth off a small base.
D. Henschen
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D. Henschen,
User Rank: Author
7/28/2014 | 5:04:14 PM
Re: Rackspace?
I'll defer to our cloud IaaS/PaaS expert Charlie Babcock, but it's a sure bet that Microsoft Azure customers have lots of Microsoft workloads that they're looking to move into the cloud. I wouldn't expect to run Windows-based server products or Microsoft SQL Server in Google's cloud. Furthermore, I'd submit that Google's cloud customers tend to be doing a lot with keyword or Google Analytics data.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
7/28/2014 | 4:33:57 PM
Re: Rackspace?
Are Microsoft's cloud customers much different from Google's? 
D. Henschen
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D. Henschen,
User Rank: Author
7/28/2014 | 3:37:02 PM
Re: Rackspace?
The graphic posted is pretty much the extent of data available, so no Rackspace info. It's all based on publically available revenue data, but they had to weed out SaaS, which is a component of multiple vendor cloud offerings.
Laurianne
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Laurianne,
User Rank: Author
7/28/2014 | 2:35:34 PM
Rackspace?
No mention of Rackspace and its "managed cloud" push?
Lorna Garey
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Lorna Garey,
User Rank: Author
7/28/2014 | 1:26:45 PM
Re: What About SaaS?
Not only is this not apples to apples, it's more like apples to a fully baked pie, served a la mode. That said, it's not surprising that companies looking for hybrid or platform capabilities would look beyond AWS.
D. Henschen
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D. Henschen,
User Rank: Author
7/28/2014 | 12:50:57 PM
What About SaaS?
I specifically asked John Dinsdale about software as a service (SaaS) offerings and after press time he reponded as follows:

The numbers specifically exclude SaaS. We are tracking revenues from infrastructure and infrastructure services and not software. Salesforce does get the majority of its revenue from SaaS-type services and we exclude those revenues. In this analysis we only include Salesforce's revenues from its PaaS offering.

Multicloud Infrastructure & Application Management
Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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