The tech sector sees huge investments in cloud service business


Apr. 2 2014, Published 3:50 p.m. ET

Google and Amazon slashed the prices of their cloud computing services

There’s a lot happening in the cloud services market of the technology sector. Market Realist published a series of analysis on how Microsoft (MSFT) and Apple (AAPL) collaborated to take on Google (GOOG), with Microsoft launching Office on the iPad. The collaboration was also undertaken to leverage the growing cloud services market. Cloud services have become increasingly popular among small and large companies, which use these services over the Internet for a subscription fee instead of buying the equipment themselves. This approach helps these companies save money, as they have to pay rental income instead of making huge upfront investments.

Tech players are making big investments to leverage cloud services market growth

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According to IDC, the cloud services market is expected to grow from $47.4 billion in 2013 to $107.2 billion in 2017, a CAGR of 23.5%. No wonder tech players are quite excited to invest in this market. On March 25, Google took a big step in announcing that it’s slashing its cloud service prices by 30% to 85%. A day after this announcement, Amazon (AMZN) followed Google by slashing its cloud services prices 10% to 65%. Google claimed that cloud network operators aren’t cutting average prices quickly enough by following “Moore’s Law.”

Recently, Cisco (CSCO) announced its big plans to invest in the cloud services market. It plans to invest $1 billion on what it calls Intercloud, which is a network of clouds together with a set of partners. Another tech giant, Intel (INTC), announced that it was making a “significant” equity investment in Cloudera, which produces the most popular version of the Hadoop software framework for big data analysis.

Oracle (ORCL) is also showing signs of acceleration in the cloud services market through a number of cloud application suites for its “Fusion” series, though it’s still a small player in this market.


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