aNewDomain — Think Amazon had a great holiday season. Just wait until its parent company releases its Q4 financial results next week.
Amazon Web Services is looking great. But it will need to stay razor-sharp in the face of some serious competition.
Why? Because every other competitor in my Cloud Wars Top 10 (see it below) is pouring extraordinary resources into their cloud efforts. as this sweeping generational shift in computing takes hold across the enterprise.
By my reckoning, Amazon Web Services is the unquestioned market leader in my Cloud Wars 2017 rankings (full list appears below) on the strength of its 10 years of hard-earned cloud experience, its massive and rapidly growing universe of happy and loyal customers, its aggressive expansion into new cloud categories, and its superb brand image and reputation.
For businesses and other large organizations ready to spend tens of billions of dollars on cloud-computing services in 2017, the good news is that the savage competition among cloud-computing vendors will intensify throughout 2017 and into 2018.
For the CXOs picking and choosing which cloud vendors to buy from—and those decision-makers now include CEOs, CFOs, CMOs, CIOs, CHROs, CROs, and heads of LOBs—there’s a fabulous buyers’ market. The competition for the next generation of business computing is the stuff dreams are made of.
Cloud Wars: My Top 10 Rankings
1. Amazon: Aggressive first-mover + rapid innovator + cool factor
2. Salesforce.com: Creating new models/categories at stunning scale
3. Microsoft: Platform is foundation, CEO is innovative architect
4. Google: Strategy unfinished but capabilities/resources unmatched
5. IBM: Aligning cloud + analytics + AI in ways customers care about
6. Oracle: Great products, but Mark Hurd’s no match for Marc Benioff
7. SAP: Ccan SAP convert all those R3 workloads to HANA in the cloud?
8. Workday: Must replicate in Financials its massive success in HCM
9. Rackspace: New private-equity owners driving sharper focus
10. HPE: Technology seems solid but positioning/messaging still murky
Because those executives will have more choices to optimize what they buy, more combinations and partnerships coming together to make cloud adoption and expansion simpler and faster, and more leverage over the cloud providers, each of which will be desperately striving throughout 2017 to be viewed as an indispensable cloud player.
For the cloud-computing providers, the outlook’s a bit more complicated: Yes, the total addressable market is enormous. Yes, buyers have overcome their anxieties about the cloud and now they are all-in. And yes, companies now realize that to keep up with the digital lifestyles and work styles of their customers, they need to exploit the power of the cloud. And sure, cloud services and technologies, once clunky, are now hitting their stride.
But there is more to the story if you really want to understand how cloud vendors stack up.
For instance:
Which of these cloud vendors has cracked the code for assembling the optimal portfolio of cloud capabilities?
For my money, Salesforce.com wins this one. It has mastered this critical art and devotes enormous attention to improving it constantly.
Which of them have the financial muscle, development and engineering expertise, and marketing approach to stand out among competition that will be absolutely cut-throat?
This is particularly challenging for two companies on the list that, while not small, happen to be the smallest players in the Cloud Wars Top 10: Workday and Rackspace.
Which of them have the technical assets to scale relentlessly?
Where developers swarm, market share follow. Amazon and Microsoft both are doing great work on this.
Which of them have the clear-headed leadership and marketing chops to frame what they have in terms of what their business customers want and need, rather than in the some jumbled context driven by history and org charts?
Salesforce has been brilliant at this, Microsoft is starting to crank up its legendary marketing capabilities, and Amazon, IBM, and SAP are all getting much better.
Amazon’s Biggest Threats
For not only Amazon but also every vendor on the Cloud Wars Top 10 list and all those other competitors that didn’t make the cut, the biggest threat they’ll face in 2017 is the self-delusional belief that past success guarantees future prosperity. In the specific case of enterprise IT and the massive move to the cloud, that means focusing on anything other than delighting and dazzling customers.
Because these CXO buyers of enterprise cloud services are sick unto death of proprietary systems and vendor-centric lock-in and endless contractual squabbles and the old tech-industry mindset that corporate-customers were put on Earth to serve the IT vendors, and not vice-versa.
So without question, Amazon’s No. 1 threat is an internal one.
Amazon also needs to keep aggressively pursuing and evaluating alliances that extend its value to customers across the end-to-end enterprise stack. It must help customers run their preferred applications on Amazon’s IaaS and, increasingly, its PaaS.
It also needs to keep delivering customers better ways to seamlessly integrate and manage all their cloud environments. That way, the new and improved cloud opportunity doesn’t simply replicate the maddeningly complex jumble of the on-premise world, where those business customers were forced to spend ungodly sums integrating mismatched stuff that was never intended to work together.
Amazon’s bread-and-butter compute and storage services face no threat from the big legacy competitors on the list—IBM and HP. While Oracle and founder Larry Ellison have vowed to cut sharply into Amazon’s enormous lead, to date that premise is nothing more than a promise.
I’ll get into this in more detail in next week’s overview of Amazon, but consider this one detail for now:
Amazon will be reporting its Q4 numbers within the next 10 days or so, and if those numbers reveal that AWS was able to maintain the same 55 percent revenue growth rate it achieved last quarter—admittedly a huge achievement—then the AWS cloud revenue for Q4 will come in somewhere around $5 billion.
That’s $5 billion–for the quarter.
Over the coming weeks, I’ll be offering profiles of each company on the Cloud Wars Top 10 list—starting with No. 1 Amazon Web Services on January 24—along with periodic updates on significant developments for the companies in the Top 10.
Businesses have begun racing to adopt cloud-computing technology and services across their global enterprises as the dramatic advantages in everything from faster time to innovation, to enhanced cybersecurity, and a profound overhaul in the economics of IT become impossible for CXOs to ignore.
Congratulations to Andy Jassy and the entire @AWS crew for dominating this week’s Cloud Wars Top 10. Check back next week for my next installment of the Cloud Wars Top 10.
For aNewDomain in Silicon Valley, I’m Bob Evans.
