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- Who is big in the cloud?
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Who is big in the cloud?
The US investment bank Jeffries has published its research into cloud provider’s revenue and for the first time finds Microsoft Azure has overtaken Amazon Web Services (AWS) in total cloud revenue but the underlying picture is a little erm.. cloudy.
When asking who is the largest cloud provider you have to start by asking “what do you mean by the cloud?”
Cloud services fall into essentially three categories:
- Infrastructure as a Service (IaaS) where a user rents a virtual machine and specifies how much CPU, RAM, storage and network connectivity they want which can be changed over time if required. Users install whatever operating system and application software they require and manage the server as their own without the expense of purchasing the server and providing a suitable hosting environment. Amazon EC2 and Rackspace are examples of providers of this type of service.
- Platform as a Service (PaaS) in addition to providing underlying hardware provides a managed operating system, managed databases and runtime environments such as a JVM or .NET. PaaS is used by companies who write their own application, website or service in a high level language and deploys it in a containerized environment. PaaS allows companies to deploy applications without worrying about hosting or the intricacies and costs of staff to manage operating systems and runtime environments. They can scale their application as business needs change, rapidly moving from development to production. Examples of PaaS services are Google App Engine, Microsoft Azure and Oracle cloud.
- Software as a Service (SaaS) provides the user with applications that they use and they have no interaction with the underlying operating system or hardware – that is all taken care of by the cloud provider. Some SaaS replaces traditional desktop software such as Office365 and Google Docs, whilst for others it is a modern way of deploying new applications such as Salesforce CRM. You could also include traditional hosted email and hosted PBX services in this category.
When considering just IaaS and PaaS, Amazon AWS is the runaway market leader with 51% market share making Microsoft Azure look like an also ran with 17%. However Azure is apparently growing twice as fast as AWS.
Where Microsoft overtake Amazon is in the SaaS sector with its Office365 product which has proven very popular with businesses that prefer the pay as you go monthly fee and reduction in desktop administration costs. When SaaS is taken into account Microsoft just pips AWS with 31% against 26% of the market respectively. Amazon does not offer hosted applications for end users, though of course their platform is used to distribute Amazon Prime video.
Most of the revenue generation for Microsoft is clearly from Office365 and other hosted Microsoft applications. That revenue will presumably be taking away from traditional desktop licensing revenue but helps them cut down on piracy and replaces a one off purchase with a monthly or annual subscription fee.
Other providers like IBM, Google, Salesforce and Oracle make up around 40% combined, the next provider of any note being Salesforce with 14% of market share with their market leading CRM system deployed totally in the cloud.