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October 31, 2017

Cloud Wars: AWS is in a league of its own

Its competitors talk a good game but AWS just keeps on dominating the market.

By James Nunns

Bigger than its five largest competitors combined, Amazon Web Services continues to be in a league of its own when it comes to worldwide cloud market share.

With quarterly revenue now at $4.57bn in Q3 and an $18bn run rate, AWS continues to see revenue growth in the area of 42% and, according to Synergy Research, holds around 35% of the market.

The closest competition, Microsoft, has a solid infrastructure business but whilst it does have a $20bn run rate, that’s mainly made up of its SaaS business of Office 365 and isn’t really Azure.

Microsoft is also growing its cloud business at a faster rate, up 90% year on year, with Google at 76% and AWS 42%, but AWS is so much bigger that it’s important to remember that it is much easier to grow a small thing than a large thing.

“While we forecast 40% growth in the total market for 2017, there’s still something a little shocking about seeing a business unit the size of AWS consistently growing its revenues by over 40%,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group.

“Microsoft and Google too deserve plaudits for the growth rates they are achieving, while IBM is gaining market share in its sweet spot of hosted private cloud services. It is becoming increasingly difficult for cloud providers outside of the leading pack to make an impression on the market share rankings.”

Without sounding like an AWS fanboy – it is an impressive beast.

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Whilst there’s often anecdotal evidence and rumours that retailers are wary of using AWS due to the threat that its parent company Amazon poses to their own businesses, the cloud unit has managed to forge strong relationships with many of the biggest brands its parent company is competing with.

Technology retailer Maplin has recently selected Ensono to deliver its multichannel

offering which is being built on AWS. The company is said to be moving mission critical applications into AWS for the first time and is using Ensono to help it with this project.

Clearly some in the retail space really aren’t that bothered about Amazon being the parent company of AWS.

What’s helped to set AWS apart from the rest of the pack is its constant pushing of the envelope and an ability to forge relationships with all kinds of companies.

BT for example has signed a strategic collaboration with AWS, an evolution of BT’s ‘Cloud of Clouds’ portfolio strategy.

– Google’s Titan security chip takes cloud wars to the hardware
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The deal, which will focus on networking, security, and managed cloud services, to help customers use AWS, combines with BT’s launch of the ‘hybrid cloud landing zone.’

BT is basically making it easy for customers to use AWS. Bas Burger, CEO, Global Services, BT, said: “The new strategic collaboration with AWS represents a major evolution in BT’s Cloud of Clouds. Together, BT and AWS are uniquely placed to help customers around the world remove complexity from their digital transformation journey. Today’s announcement is just the beginning, with much more to come.”

Then you have Amazon joining the likes of TechMahindra, and IBM to collaborate with AT&T on new software initiatives.

Cloud WarsAnn Hatchell, Head of Network Marketing at Amdocs, said: “This is a huge step forward for the telecoms industry: an open source approach allows the telecoms community to exchange knowledge and expertise, providing a common framework for real-time, policy-driven orchestration and automation of physical and virtual network functions.”

Amazon is also a part of a consortium, that includes Facebook and SoftBank, which is building a new submarine cable that will link Asia and the United States.

The “JUPITER” cable is expected to offer 60 TBps capacity and, for Amazon at least, will help it to connect its data centres with low-latency connectivity to the US home-base.

The point is that AWS is ticking all the boxes and it doesn’t seem to be resting on its laurels. Whilst its competitors talk about winning the cloud market and overturning AWS’s lead, AWS just keeps on rolling and dominating the market.

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