Google, Microsoft Develop New Ways to Compete with AWS

Amazon currently is the dominant cloud computing service; according to Amazon Web Services chief executive officer Andy Jassy, the company has several times as much business as the industry’s next busiest 14 providers combined. In the No. 2 and No. 3 spots are, respectively, Microsoft and Google, and both of them attempt to leverage their strengths and exploit perceived weaknesses of AWS to boost their own market share. Both companies see some strengths in AWS — its self-service model, for example — as vulnerabilities.

Bloomberg reports that AWS “generated $4.6 billion in sales in the most recent quarter.” In contrast, Microsoft is, according to Gartner, “less than one-fifth Amazon’s size in terms of sales of infrastructure services, which store and run data and applications in the cloud,” and Google “makes one-fifteenth of Amazon’s cloud revenue.”

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“AWS effectively defined the notion of cloud computing,” said Gartner analyst Ed Anderson. “It’s perceived as the cloud leader and pacesetter.”

Microsoft has, nonetheless, focused on “the sorts of salesmanship and relationship-building skills not always prized at Amazon’s Seattle headquarters,” to attract Bank of America and Chevron for its Azure cloud unit. “There’s not one default choice,” said Microsoft executive vice president Kurt DelBene.

Microsoft chief executive Satya Nadella’s strategy includes turning the company’s “sales force into a roving R&D lab and management consultancy,” which includes “3,000 dedicated software engineers who can build applications for prospective clients during sales calls, demonstrating on the spot what they can do for them,” and then deploying to the site the day after the customer signs on.

When Microsoft pitched Chevron, the sales team used its HoloLens augmented reality headset which, “when paired with Microsoft’s cloud software … allows Chevron’s senior engineers to virtually oversee the work of software technicians around the globe as they install equipment.” As Chevron chief information officer Bill Braun said, “They understand the enterprise.”

Gartner’s Anderson also points out that potential clients accustomed to using Windows and Office software are also “more likely to go with Microsoft when they decide to replace their own data centers and servers with public cloud infrastructure.”

Anderson adds that Google and Microsoft also leverage the fact that some of Amazon’s potential customers are rivals to other parts of the company’s business. For example, Wal-Mart Stores and “Bangalore-based Flipkart Ltd. don’t want to see their Amazon cloud payments lining the coffers of the retailer that could ultimately put them out of business.” Flipkart is now a Microsoft customer for cloud services, and, according to The Wall Street Journal, Wal-Mart has been “telling some technology companies that if they want its business, they can’t run applications for the retailer” on AWS.

Still, AWS is expected to “generate $89 billion in sales by 2021, up from $35 billion today.”