Those who work in IT know that cloud services are the way of the future. Rather than spending extremely large amounts of money on necessities like servers, software stacks, middleware, and more, without the option of scalability, businesses are slowly but surely switching to the cloud. The only question is: Who will win the cloud wars?
Amazon Web Services and Microsoft Azure
You can’t comment on emerging technology in the cloud wars without discussing Amazon Web Services (AWS). As you likely know, AWS dominates the market. In 2015, Amazon brought in $7.88 billion from AWS, with this revenue steadily increasing in each quarter.
One of the reasons Amazon dominates the market space is because they were the first to burst into this now booming market. In fact, they’re said to be the fastest-growing enterprise software company ever. AWS has continued their lead so far by frequently offering new services and continuously cutting their prices.
Microsoft’s Azure trails AWS with the second-highest market share. Microsoft’s CEO Satya Nadella focuses a lot of the company’s attention on the cloud, attempting to add new software and services delivered with their cloud services. Microsoft also has a commitment to regularly cut prices, competing with AWS and Google.
Microsoft bought LinkedIn for $26.2 billion this past summer, attempting to join its “professional cloud” customers and the LinkedIn network. With this acquisition, Microsoft gains all the data contained in LinkedIn, which boasts over 433 million members, who competitors have no access to. This is said to be used to create services specifically for business customers.
So, the cloud market is vastly led by AWS and followed by Azure, both of which are adding new services practically by the minute.
Don’t think this means that Google isn’t pushing forward to earn a spot on the top of the cloud business, though.
Google’s place in the cloud wars
About a year ago when they finally decided to become a player in this game, Google hired Diane Greene, VMware’s CEO and founder to lead the future of Google's cloud computing technology. With better leadership, Google can guide itself closer to the top of the pack, offering the right technology and packages, as well as developing a broader cloud-based ecosystem.
Greene has changed a number of things since she’s been at Google, such as hiring more support staff and those who have experience with enterprise sales. She’s also created a CTO, or chief technology officer, at the company, who takes care of “technical questions, design, or customization of large customer needs.”
Greene has streamlined the process to make sure that separate units focus on specific needs and industries. This has been improved by creating a Global Alliance program for “working with big global partners” and starting programs that get more reseller partners on board. These reseller partners are smaller consultants who offer niche services, allowing Google to emerge in all possible markets.
In an interview with Business Insider, Greene explained, “We all get together once a week, we share and discuss and debate.” The combined structure works much better in streamlining the cloud services available.
“It wasn’t possible [to have these meetings] before I came because sales and marketing were in a different division than cloud,” Greene said. “And cloud was in a different division than apps. I feel like the structure is in place now and we’re hiring very aggressively.”
So, where is Google going in the cloud wars? Urs Holzle, Greene’s partner, believes that Google's cloud business can surpass its ad sales in just a few years. To make it clear how much they'd need to make from their cloud services for that to happen, 89 percent of Google’s $75 billion in annual revenue comes from ads.
At a Structure conference in San Francisco, Holzle said the goal “is for us to talk about Google as a cloud company by 2020.” How do they plan to do that?
According to Greene, it’s the vast amount of technology that Google is able to offer to its customers. In the interview with Business Insider, she claims, “I’m a little biased, but I really do think, on the hard stuff, we’re the world’s best cloud.”
Unfortunately for Google, it seems like most of the world puts its faith in AWS. Not minding their third-place ranking behind AWS and Microsoft, Holzle explains, “we have lots of enterprise customers, happy enterprise customers.”
The emergence of the cloud, which is expected to dominate the technology market in the future, is compared to the rise of the smartphone by Holzle. As he recalled, the iPhone came and revolutionized phones, similar to AWS, but Android now has a monopoly on the smartphone market.
In fact, it just recently widened its lead over Apple, shipping 88 percent of phones worldwide. Continuing the analogy, Holzle said, “I hope we’re going to be the Android of that story.”
Google recognizes they don’t have the number of features that Amazon does, but “we have the basics for the enterprise that you need,” Greene explained in her interview. “We have more partners to bring on, but we’re doing that very quickly. But the hard stuff, I do think we’re the world’s best.”
True to their word, Google has already announced many new features for its cloud services within the past year. For example, users are now able to access the same expert artificial-intelligence technology and machine-learning tools that Google has. This can help translate text, understand images, and more.
Its cloud division is the fastest-growing part of the company, and Google’s claim to user security is hard to beat. “Google’s been in the crosshairs of every major hacker from the beginning; we really hardened our systems more than anyone else,” Greene said.
While that statement is debatable, and Google doesn’t have the best track record for users’ privacy, it is certainly true that their security is one of the strongest of any companies. Regardless, Google hasn’t revealed its cloud revenues, but according to the Telegraph, they were estimated to be around $500 million last year, much less than Amazon.
Do you think that Google can catch up to Microsoft or overtake AWS as the No. 1 cloud services provider? This is just the beginning of a service that is expected to grow immensely within the coming years. Where do you think Google will be in the cloud wars during the coming years?
Photo credit: Flickr/Matt Montagne