Introduction and Azure's challenge to AWS
Unlimited storage and computing power. On tap. What's not to like? Hyperbole is hard to avoid, but it's no exaggeration to say that public cloud services may be the biggest transformative technology of our time. So much so that finding a fast-growing company – tech or otherwise – that doesn't use the public cloud is becoming difficult.
But who is providing it? As it becomes more of a commodity – and the market grows exponentially each year – some of tech's biggest players are attempting to cash-in on the cloud as companies try to hyper-scale their apps and services.
The public cloud is big, and growing: IDC predicts that by 2020, spending on cloud services and related hardware and software will be more than $500 billion (around £330 billion, AU$690 billion), three times the current level. There are hundreds of providers, with some big names among them vying for top spot in this lucrative market.
Which public cloud is the biggest?
It's projecting year-on-year growth of over 80% and is now a $7 billion (around £4.6 billion, AU$9.7 billion) business. This is Amazon Web Services (AWS), which is valued at $50 billion (around £33 billion, AU$69 billion) and continues to lead the market.
"It may top out at $9 billion (around £6 billion, AU$12.5 billion) in total revenue for the year, up from roughly $6 billion (around £4 billion, AU$8.3 billion) the year before – a breakneck pace for an organisation that now claims over one million active customers," says William Fellows, cloud expert at 451 Research.
"This pace of growth is possible because AWS pioneered the commercial success of cloud computing, starting with IaaS (Infrastructure as a Service) and building out from there," he adds, adding that it was Amazon Web Services' near total automation of IT resource and service delivery that encouraged a new consumer-style retail experience to buying business IT.
AWS customers include Dropbox, Pinterest, Airbnb, Slack, Tinder, Dropcam, Ticketmaster, Persicope, Capital One, Netflix and even NASA's Jet Propulsion Laboratory.
What are the key characteristics of AWS?
At its core is the Elastic Compute Cloud (EC2) service and its S3 storage service. However, it's constantly adding more services, from Amazon Machine Learning and AWS IoT to QuickSight and Kinesis Firehose.
"AWS has used its first mover advantage, along with its ability to quickly add new features, to stay out ahead," says Patrick McFadin, Chief Evangelist for Apache Cassandra at DataStax. Big data and analytics, Internet of Things, DevOps – it's all here. "It keeps adding new products that replace traditional solutions [and] the result is an erosion of objections from large organisations considering a cloud move."
AWS' pay-as-you-go bandwidth pricing is also a key part of its success; fear of financial lock-in is not a consideration. It's the extra features and SaaS that makes AWS its money, and that's the industry trend; the price of compute is getting less and less – it's a loss-leader.
However popular it might be with startups and big companies, AWS doesn't have long-term relationships with big business, unlike one of its challengers.
Can Microsoft Azure challenge AWS?
It's definitely trying. "Microsoft Azure is coming on strong and Google is lingering back, surprisingly," says McFadin, though he thinks the former is still far behind AWS on features and performance. "Microsoft is throwing a lot of its might behind their cloud and it's starting to show … it also has the best large enterprise relationships, and it understands how those enterprise IT teams work."
Redmond's customers include Apple iCloud, AccuWeather, Boeing, Dell, Travelocity, Samsung, BMW, LG, eBay, Pixar, EasyJet, NBC News Digital and GE Healthcare. With the predicted continued growth of cloud computing – particularly the coming trend for big companies to warm up to, then migrate completely to the cloud – Microsoft's more 'touchy-feely' reputation among big business gives Azure the potential to catch up with AWS.
Google Cloud Platform and IBM Bluemix
What about Google Cloud Platform?
When it comes to performance and networks, nobody can compete with Google Cloud Platform, so the pay-as-you-go trend ought to allow them to dominate the public cloud business. So why is it struggling?
"Google can compete at a price point that is hard to beat, and has created a lot of downward price pressure on the market," says McFadin, who thinks the web search giant is slipping up on its go-to-market plans. "It still treats cloud computing like a retail experience and hasn't quite understood the enterprise market," he says on the subject of why the big companies are so far staying away.
Google Cloud Platform, which integrates perfectly with Google Compute Engine, Google Cloud Storage, Google App Engine and Google Cloud SQL, is used by Snapchat, TiVo, Citrix, Ubisoft and Costco. It's behind AWS on features, but is expected to catch up in the next few years. Google mostly has its eye on the banking industry, which is yet to embrace the public cloud.
What about IBM Bluemix?
Meanwhile, data centre giant IBM is pushing a hybrid and private cloud via Bluemix (for developers, and growing fast) and Watson (a dash of cognitive and artificial intelligence that gives a unique appeal), though it is IBM's less radical approach that gives it a unique appeal to companies who still aren't sure whether to totally commit to the public cloud. Customers include Ethiad, EVRY, Finnair, ANZ, Columbia Pipeline and Hootsuite, though Bluemix is aimed squarely at developers and startups.
There are other challengers out there in the public cloud business – most notably Salesforce as well as Oracle, Rackspace and others – but one challenger is particularly scary to the incumbents. Chinese internet giant Alibaba has just opened a vast data centre in the US through its cloud computing arm Aliyun – it wants a chunk of the massive and fast-growing global public cloud market.
Is there a common problem with all of them?
Lock-in, security and data migration are the big three worries for business. "A lot of companies do worry about lock-in," says Dave Hrycyszyn, Director of Strategy & Technology at Head. "When you start to use all the extra services of a given cloud provider, you tie your system architecture to that provider pretty irrevocably." However, Hrycyszyn thinks that many companies – especially startups – should stop worrying and learn to love the architectures they get; the extra development speed is a worthwhile trade-off for most.
"Migrations are never easy and all too often the daunting task ahead stops businesses from making the right choices for their future," says Ian Masters, VP of Cloud and Alliances at Vision Solutions, who states that although most cloud providers offer solutions that can do the work around migration rather than requiring manual intervention, they tend to be quite niche and only support one platform, application or cloud.
"However, there are solutions available today which can work across multiple platforms, applications and cloud offerings, such as Amazon AWS and Azure, or between public and private clouds," he says.
Speed and security
The speed of migrating is also a fear, though AWS came up with a novel solution recently. Security is being addressed primarily by promises to locate new data centres within various national borders. Microsoft's recent announcement of UK-based data centres comes soon after AWS revealed it was to open a new region in the UK by the end of 2016 or early 2017.
That will allay the fear of some UK-based companies worried about depending on foreign data centres, but generally the wind is blowing in the other direction. "I'm seeing a big change in the past 12 months," says Hrycyszyn. "Companies that were previously worried about the data security implications of cloud providers are starting to seriously consider moving production data into the cloud … but it's still far from universal."
Keeping data within borders
However, the 'national card' is a powerful one given recent security breaches, especially considering the commoditisation of the cloud services market. "There is nothing unique about the services that the large US companies offer …[they] merely resell VMWare these days, or use Openstack, Hyper-V or Xen to power their own cloud offerings," says Nathan Johnston, Head of Sales at UK cloud hosting company Memset.
Johnston believes that the UK government should be mandated to use UK data centres, and that keeping data within national borders should be considered best practice for private sector companies, too. It doesn't help that big US corporates, including Google, which books all UK sales in Ireland, aren't seen to be paying their way.
That's moot for US companies after a cloud solution, but as commoditisation and uniformity of the public cloud increases, the rest of the world will wonder why the cloud services industry even needs a Big Four.
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