Amazon, Microsoft, Google Competing for Cloud Business, Alibaba and Tencent Join

SynergyResearchGroup published statistic data which shows that Amazon now is commanding 34% of global cloud market share; Google ranks fourth, with 5% of market share; Microsoft and IBM rank second and third respectively. And Microsoft takes in charge of 12% of cloud market share, one third of Amazon’s cloud market share.

With the stimulation of earnings improvement, the market capitalization of five tech giants on American stock market (Facebook, Apple, Amazon, Google, and Microsoft) all surges. Google’s parent company Alphabet’s share price is even over $1,000.

If observing carefully, people can find that those tech giants that have published their financial reports, such as Amazon, Google and Microsoft, all made emphasized cloud business. Amazon’s AWS reached a $1.17 billion of operating profit, more than $861 million over last year; a $4.58 billion of net sales, increasing 42% compared with last year.

Amazon started earlier than others in the cloud business field, and started to offer cloud services in 2006. According to its Q3 earnings report, AWS is still growing, but it is the 8th slower growth in success. The fact shows that the pricing war in the cloud service field has substantial impact on corporates’ earnings. In order to attract more users, Amazon, Microsoft, Google are now fighting against each other, and each of them has adapted radical pricing strategies. 

Since October this year, AWS started to apply per-second calculation for EC2 service users, and people though it was a upgrade of pricing ware. For this, JasonZander, Microsoft’s VP and General Manager of Cloud and Enterprise Business Unit Azure, ever said that considering that the frequency of use of containers is always fluctuate, Microsoft Azure has already applied per-second calculation on containers, which is earlier than Amazon. So, in term of the calculation on infrastructure, the company has great global competitiveness. 

Microsoft’s strategy on cloud business transformation has shown signs of success. According to the latest Microsoft’s earnings report, Microsoft Azure’s earnings is up by 90% in year-on-year growth, which is 2x faster Amazon AWS’s earnings growth rate. The main reason of such a high increase is that Microsoft has a great number of fans of its desktop software and Windows OS, who still choose Azure as their cloud hosting provider.

For Google, even though the company did not separately publish its cloud business performance, it still disclosed that the earnings growth of other business including cloud business is $3.4 billion, up near by 40%. 

In order to challenge Amazon AWS and Microsoft Azure, Google joins force with Cisco on developing products used for cloud and local data centers, and they expect the services could be generally available in the half of 2018. 

Additionally, these cloud giants are also positively working on data center layouts abroad. Amazon AWS’s Indian data center has been put in operation, and the company is now deloveping Middle East market. Microsoft is planning to set up data centers in Africa. Google has already opened data centers outside of USA, and it has announced that it will open data centers in another five countries before 2019. 

Moreover, China’s Alibaba Group and Tencent also start to participant in cloud service competition. Morningstar, an authoritative investment research institute in the U.S., has released the latest science and technology observation report, which points that by 2021, the global public cloud market would continue to integrate, and form a world dominated by Amazon, Microsoft, Alibaba and Google. 

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