November | 2020
The Context
Cloud computing has become the norm and defacto operating model for today’s businesses in order to innovate, cut cost and increase agility. One of the fundamental questions that is often posed by our customers when they embark on their cloud journey is – which is the best hyperscaler in the market today? Unfortunately, the answer is not so simple and straightforward because every hyperscaler brings unique strengths to the table. Some are good in artificial intelligence (AI)/machine learning (ML) capabilities, while others are strong in content delivery. It is therefore best to choose the provider that is best suited for the use case that the customer has set out to solve. This is one of the reasons why most customers today have a multi-cloud strategy.
Each of the hyperscalers have their individual strengths and weaknesses that positions them uniquely for certain use cases. However the market is rapidly evolving and hyperscalers are acquiring smaller companies with niche capabilities to enhance their overall service offerings. For example, Google acquired Looker and Salesforce acquired Tableau recently to enhance their capabilities in the business intelligence (BI)/analytics space.
The Stack
The battle for leadership in cloud computing has clearly heated up in the last few years and this is expected to continue as more customers embark on their public cloud journey, while cloud service providers race to capture the larger share of the pie.
Currently, it is a three way race between the market leaders - Amazon, Google and Microsoft. From an Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) perspective, AWS, Azure and Google Cloud Platform (GCP) are clearly the leaders and have the largest market share today followed by Alibaba Cloud, Oracle, IBM, and Salesforce amongst others.
As per estimates from various analysts 1,2 (Canalsys, Statista and others), AWS has an average market share of 32%, followed by Microsoft Azure (19%) and Google Cloud Platform (8%). Interestingly Ali Cloud has a market share of 6% and enjoys a large customer base in the APAC and EMEA markets.
The AWS Story
While it is clear that in the current state, AWS leads its two closest rivals by a significant margin, the gap between them is quickly reducing. Azure and Google have both taken a very aggressive posture in terms of their go to market strategy and execution and it is paying off well for them. AWS has had the early mover advantage in the cloud computing space. It was five years ahead of its closest rival, Microsoft. Consequently, its service offerings are the most comprehensive and enterprise ready although most would argue that its functionality rich offerings make it much more complex to use and navigate than its competitors. Also, AWS doesn’t seem to have the best pricing to offer to its customers probably because it believes that its functionality rich offerings command a premium pricing. One of the biggest challenges for customers who have embarked on a hybrid cloud journey with AWS is its lack of interoperability support with private cloud. However, this is slowly changing with AWS making strides to resolve the issue. In spite of these challenges, AWS continues to enjoy huge popularity with its service advantage and uptime outweighing these challenges. It also has a well-established partner ecosystem and extensive products offerings in the marketplace for its customers to leverage. AWS has some good offerings when it comes to data center exits for customers. It is able to help a wider range of customers their data center exit strategy by giving them incentives and buyback offers for assets and facilities. For example, the hyperscaler could potentially evaluate a facility for its B2C business use and that could be a win-win for both the customer and hyperscaler.
One of the additional services that Amazon offers that clearly differentiates it from its competitors is Amazon Connect. It is an AI based contact center solution that was created grounds up for its Amazon business and is now being offered to its customers.
The Azure Story
While Microsoft joined the party much later, it had a head start with bundling all of its on-premises software such as Windows Server, SQL Server and SharePoint and repurposing/rebranding it on public cloud as Azure Cloud. Microsoft’s biggest advantage was its large enterprise base already using Microsoft products. For practically all existing enterprise Microsoft customers, it seems to be a natural progression to cloud with an easy migration path and deep discount offers from the hyperscaler as a reward for loyalty. With its significant global data center footprint, Azure offers the scale that customers need to bring their applications closer to their users around the world.
However, Microsoft has had its own share of problems over the years. Although it may seem enterprise ready, customers have often cited lack of technical support and documentation issues along with its bout of network outages.
The Google Story
Google has been a late entrant to the public cloud offering to enterprise customers and is placed a distant third after AWS and Azure, possibly because of the lower number of service offerings and the number of global regions, but that is changing at a blistering pace. Historically, it has lacked enterprise ready contracts, licensing agreement, legal terms, and sales support but that has changed over the last year with the new Google Cloud CEO at the helm. The go to market strategy and execution posture has changed significantly and it has been winning large enterprise customers. There is also tremendous focus on rapid expansion of its state of the art low carbon footprint data centers globally connected by dedicated fiber network for lowest latency/fastest response time.
Traditionally, most customers have chosen Google Cloud as their secondary cloud service provider rather than their primary hyperscaler, mainly due to its strength in offerings like big data, analytics and machine learning. However, there are large customers who have chosen Google as their primary hyperscaler as well. These customers either operate in the same business as Amazon and therefore prefer to choose an alternative to AWS or have a strong engineering focus, are DevOps centric or open-source centric and hence are less aligned to Azure.
One of the areas that Google has received plaudits from customers is its support for multi-cloud management. Google has been a pioneer in open source and supports a huge open source ecosystem. In fact, it has a very strong offering in containers, since Google developed the Kubernetes standard that other hyperscalers now offer. Another area that Google Cloud wins over its competitors is its ability to offer a broader set of assets of Alphabet to customers. It is also known to offer deep discounts when customers sign up for large multi-year consumption agreements.
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| AWS |
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AZURE |
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The Verdict
The reason for picking one hyperscaler over another will differ from customer to customer based on the use case but there are certain key characters of competing clouds that make them inevitable choices.
AWS continues to be a choice for customers who have a global footprint, are looking for a wide range of services and most importantly, do not view Amazon as a conflict in their line of business. It offers a platform that is feature rich for developers and also has several configurable options, monitoring and policy features. The depth and breadth of feature rich services and its robust network of data centers with high availability and minimal outage over the years has made it a default choice for large global enterprises.
However, Microsoft is closing the gap at breakneck speed. For customers that have already made huge investments on Microsoft products and developer skills, it is easier to extend the existing knowledge and consistent experience across on-premises and public cloud through Office365, AD integrations etc. For easier transition to Azure cloud, it offers significant financial benefits to its existing enterprise customers.
And finally there is Google which is focused on strong execution under the new leadership with a clear strategy on improving its enterprise customer base and increasing its products and services as well global reach with more data centers. The results have been really encouraging. It continues to have the best in class growth across its competitors and the future looks very promising.
However, irrespective of the hyperscaler that is chosen, customers should continue to focus on their core objective of cloud adoption namely achieving agility, scalability, resiliency, and cost management.
References:
Debashish Ghosh
Cloud Leader for Wipro’s Consumer Business Unit
Debashish Ghosh is the Cloud Leader for Wipro’s Consumer Business Unit which serves customers in a range of consumer-focused industries including Retail, CPG, New Age, Media, Entertainment, Travel, Transportation, Hospitality, and the Public Sector. He has over 25 years of experience in the IT industry and has been working with several global customers to assist them in their cloud journey.
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