Amazon Web Services: Crushing the Competition?
March 23, 2016
I read “Attack! Run. WTF? A Decade of Enterprise Class Fear and Uncertainty with AWS.” I am not sure if Amazon’s Web Services’ business is being praised or criticized. Nevertheless, the write up has some interesting factoids. I highlighted these statements:
IBM’s Cloud Services
- IBM, … was so flabbergasted [when Amazon won a US government contract] that the Blue Shirts of Armonk decided on the old-school route to victory and filed a legal complaint asking the government to re-evaluate IBM’s deal against that of Amazon, which Big Blue later withdrew.
- Famed for re-inventing itself around software in the 1990s under Lou Gerstner, the majority of IBM’s focus for the 2000s was devoted to unloading the PC and the server businesses on China. The firm is now trapped in a maelstrom of transition, restructuring and layoffs. Like Microsoft, IBM seems to have believed AWS couldn’t happen to it, that what the world needed was the same server software and services. It was nearly seven years after AWS that IBM realized something was afoot – probably when it lost both the CIA deal and got slapped about its attempts to make the CIA love it – that Big Blue said it would spend $2bn buying computing player SoftLayer and in 2014 throw $1.2bn into a massive data centre expansion to host your data and compute.
Microsoft Cloud Services
- Azure succumbed to classic innovator’s dilemma: how to sell a new platform as a package and at a price to maximize revenue without cannibalizing the company’s actual main money-makers – PC and server software. After delayed starts under Ray Ozzie and Bob Muglia, the technology roadmap only really clicked under new CEO Satya Nadella and executive software nerd Scott Guthrie. One brought the CEO-level commitment, the other made Azure work for developers.
- Gartner today regards Azure as number two, behind AWS, and yet… According to Gartner’s incumbent Cloud Queen Lydia Leong, Azure lacks the polish of AWS.
Oracle Cloud Services
- Oracle, which bought Sun, preferred to play a Game of Thrones that was corporate M&A to hold onto its position in IT. Sadly, it chose wrong; Oracle spent $8.5bn on Sun but ultimately discontinued the company’s fledgling utility computing service. Hardware and Java was what Oracle wanted.
- Today, Oracle’s resultant hardware business makes just half the revenue of AWS and is is shrinking – falling 13 per cent to $1.1bn – versus AWS’s 69 per cent growth last quarter to $2.4bn. That past complacency of Oracle’s CEO on cloud has put Oracle firmly in a pack of also rans behind AWS on platform cloud, with Oracle now throwing PR at a problem to convince Wall St it is credible as a provider of IT as a service.
And what about Amazon? The write up points out:
- AWS is still attacking – growing at a phenomenal rate, 71 per cent in its recent quarter to $2.4bn and 69 per cent for the year to $7.88bn. The appetite among enterprises for AWS’s style of technology and model of delivery clearly hasn’t yet been satiated.
- …the truth is AWS now has its fences across so much of the cloud, removing them isn’t an option. The big question then for AWS at the age of 10 is this: when will the old men of IT regain their wind? How big will be their counter-attack and will it be concerted? Will it pose a tangible threat and how would AWS respond?
I noted that Apple has shifted some of its cloud business to the Google from AWS. I assume the Board of Directors’ excitement is now behind the kids from Cupertino. What’s clear is that IBM and Oracle seem to face an uphill slog if I understand the write up. Read the original and decide for yourself. I love the WTF. Some stakeholders may be asking this question too.
Stephen E Arnold, March 23, 2016
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
