Amazon doubles its public cloud lead, can anyone catch up?

Microsoft and Google provide stiff competition in the cloud, but no one is closing the AWS gap.

Image: CNET

There are clear signs that Microsoft Azure is making gains against Amazon Web Services (AWS). But, based on recent data from Synergy Research, it's not nearly enough. As reported by Liam Tung for ZDNet, AWS has double the market share of its next three largest competitors combined. While that isn't as dramatic as AWS formerly boasting 10X the utilized capacity of its largest 14 competitors, it's still a sign that that, in the public cloud, winner takes most.

Really, really big

Synergy Research Group's study comes on the heels of Amazon announcing $3.2 billion in AWS revenue, generating $861 million in operating income. AWS competitors don't even bother to break out profitability for their public cloud offerings, likely because there isn't much to speak of.

SEE Amazon still crushing cloud competition, says Gartner Magic Quadrant for IaaS

Microsoft's cloud business grew by 116% year over year, while Alphabet announced that its Google Cloud business generated "the highest percentage growth of all its product lines," albeit on a relatively modest base. Both are impressive, earning cloud pundit Bernard Golden's estimation that both follow AWS as part of a cloud trinity with such commanding leads that "it's impossible for anyone to catch them."

And yet, one cloud stands out, and that's AWS, with double the revenue of its next three largest competitors:


Who can catch up?

At this point, it's worth asking, who can catch AWS? Of Microsoft and Google, Microsoft has made the most headway and seems likely to continue. But, if we ask that same question of who can catch the big three cloud providers, the answer seems to be a resounding "No one."

Not IBM. Not Oracle. Not any combination of also-rans.

The reason, according to Golden, is innovation. AWS certainly touts this as the reason it leads. According to Amazon CFO Brian Olsafsky on the company's earnings call, "[Customers tell us our] functionality and pace of innovation is greater than our competition. We have added more new significant features and services this year already than we had all of last year when we added 722."

Just one indication of this innovation, at AWS and its top competitors, is the onslaught of new, increasingly popular databases, as measured by DB-Engines. Whether open source or not, these cloud giants keep opening up amazingly rich code, with Google perhaps besting them all. Take a look at the next tier of cloud providers and you'll struggle to find much innovation that they can afford to open source.

No wonder Golden can credibly claim, "most of the innovation in the industry resides with the big cloud providers. Companies that don't want to be left on the dust-heap of history need access to that innovation and will embrace it despite putative lock-in concerns." AWS leads that pack, but the top-three (AWS, Microsoft, and Google) seem to have established a joint dominance that gives customers choice and incredible wells of innovation to draw from.

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