The Amazon-Microsoft Competition Is about to Get Fiercer



Technology players’ initiatives

Earlier in this series, we learned that cloud and cognitive computing will continue to dominate the IT (information technology) space, which explains technology players’ ongoing investment in them. Amazon (AMZN) recently announced three new AI (artificial intelligence) services—Amazon Lex, Amazon Polly, and Amazon Rekognition—for its cloud users.

Amazon’s recent disclosure of its new networking chip, the Annapurna ASIC (application-specific integrated circuit), suggests that competition is rapidly increasing in the cloud space. In the past, Amazon has not been forthcoming in sharing details on its infrastructure. The company’s disclosure indicates that hyperscale data centers are moving beyond CPUs (central processing units) to specialized chips such as ASICs, FPGAs (field-programmable gate arrays), and GPUs (graphics processing units).

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IBM (IBM) has already invested billions of dollars in machine learning and AI through partnerships and acquisitions to develop its Watson platform. Recently, IBM partnered with NVIDIA (NVDA) to promote a computer’s capacity to “think and learn in more human-like ways.” IBM has acquired Merge Healthcare, AlchemyAPI, Phytel, and Explorys to boost Watson’s capabilities. Also, IBM had the most AI patents among peers in 2015.

In October 2016, IBM announced an investment of $200 million to develop its Watson IoT (Internet of Things) headquarters in Munich (EWG), focusing on blockchain and security.

Microsoft (MSFT) acquired Genee in 2016 to boost the capabilities of its virtual personal assistant, Cortana, and make a move in the AI space. Through its “Mobile First, Cloud First” Strategy, Microsoft aims to achieve a $20 billion annualized commercial cloud revenue run rate by 2018.

In 2016, Salesforce (CRM) announced the launch of “Salesforce Einstein,” an AI platform. Salesforce claims it is “the world’s first comprehensive artificial intelligence platform for CRM.[1. customer relationship management]”

In October 2016, Symantec (SYMC) partnered with VMware (VMW). Symantec’s endpoint management and threat security joined with VMware’s Mobile Security Alliance.

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Customers likely to benefit

The aforementioned cloud players, namely Amazon, Microsoft, IBM, Google, and Oracle, known for their billion dollar cash reserves, have the access to the funds, the scale, and the footprint to be competitive. They can build cost-efficient designs as well as demand lower prices for server, storage, networking, or any computing.

In January 2016, Amazon announced a price cut for its Amazon Web Service, which prompted Microsoft to slash Azure’s price. These moves by Amazon and Microsoft impacted Rackspace, which finally relented to its sale to Apollo Global Management.

The above presentation by Cloudyn.com compares features of Amazon’s AWS, Google’s GCE (Google Compute Engine) and Microsoft’s Azure. Customers are likely to benefit from the ongoing price war and competition between Amazon’s AWS, Microsoft’s Azure and Google cloud, as this rivalry will result in sizable price cuts.


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