How Amazon Web Services Dwarfed Big Technology Companies

Amazon’s AWS holds a formidable lead in the cloud market

As demand for cloud computing services and applications gathers steam, the battle between the world’s top technology companies is heating up. Although Amazon (AMZN) remains the clear market leader in the cloud space, Microsoft (MSFT), IBM (IBM), and Google (GOOG) are giving stiff competition to AWS (Amazon Web Services).

A key advantage of cloud services is that enterprises can replace their upfront IT (information technology) infrastructure expenses with variable costs. The cost of cloud services varies according to the size of the business. To a large extent, this reduces companies’ spending on planning and procuring IT infrastructures.

How Amazon Web Services Dwarfed Big Technology Companies

According to Synergy Research Group, “For full-year 2015 AWS share of the worldwide market was 31%, followed by Microsoft (9%), IBM (7%), Google (4%) and Salesforce (4%).”

How AWS has evolved to keep its lead

AWS has grown over the years. In the past, the company offered to lease out simple services such as computing horsepower and data storage. However, AWS has added complex services, including cloud-based business applications, to its existing service portfolio in order to maintain its leadership position.

Amazon continues to invest in AWS. The company added 722 new features and services to AWS in 2015, and it launched a new database service on AWS entitled Amazon Aurora, a relational dataset that provides better performance and cost efficiency than MySQL while ensuring data consistency and integrity.

The company also launched QuickSight in conjunction with AWS. According to Amazon, QuickSight is a service that is capable of handling “many types of data-intensive workloads including ad targeting, customer segmentation, forecasting and planning, marketing and sales analytics, inventory and shipment tracking, IoT [Internet of Things] device stream management, and clickstream analysis.”

Amazon constitutes nearly 9.5% of the PowerShares NASDAQ Internet Portfolio ETF (PNQI).