uploads///Top Cloud Vendors by Market share

Can Amazon Fend Off Cloud Insurgents?

By

Feb. 17 2017, Updated 10:37 a.m. ET

Rivals up in arms against AWS

Amazon (AMZN) has its work cut out for it in the cloud. Microsoft (MSFT), Alphabet’s (GOOGL) Google, Oracle (ORCL), and International Business Machines (IBM) have all been announcing competitive threats against Amazon Web Services (or AWS), raising concerns about the position and prospects of Amazon’s cloud business. Yet cloud operations have become a key profitability driver at Amazon.

Article continues below advertisement

Toughening cloud environment

Amazon’s 4Q16 offered a glimpse into the toughening competition in the cloud computing market as AWS growth slowed. The company reported AWS revenue of $3.5 billion, although that indicated a growth of 47% YoY (year-over-year), the growth slowed from 55% YoY in the prior quarter. Furthermore, the reported revenue missed the consensus estimate that called for cloud revenue of $3.6 billion.

AWS has the most to lose as a cloud leader

Recently during the company’s 2Q17 earnings call, Microsoft’s CEO Satya Nadella offered a glimpse into how the company intends to keep Amazon from its traditional enterprise strongholds.

Microsoft believes that Amazon doesn’t have expertise in the business of selling software and services to corporations. As such, while AWS is a credible competitor in the cloud infrastructure space, Microsoft believes Azure can hold Amazon in software-as-a-service (or SaaS) and other cloud adjacencies where AWS is likely to struggle to gain a meaningful foothold.

Oracle also recently announced plans to open several cloud regions this year, escalating competition for the cloud computing market.

On its part, Google is pushing hard against Amazon, and last year it succeeded in persuading Apple (AAPL) to move a portion of its cloud operations from AWS to Google Cloud.

Being the cloud leader, Amazon has the most to lose if its rivals succeed in their efforts.

Advertisement

More From Market Realist

  • BioNano Genomics Saphyr system
    Company & Industry Overviews
    BioNano Genomics (BNGO) Stock Looks Like a Buy, Solid Opportunity
  • Delta aircraft
    Company & Industry Overviews
    Delta Air Lines Updates Mandatory Vaccine Policy, Explained
  • AMC advertisement in walkway
    Company & Industry Overviews
    Why It's Time for Most Investors to Sell AMC Entertainment Stock
  • 100 Thieves founder Matthew Haag
    Company & Industry Overviews
    Why Growing Esports Company 100 Thieves Isn't Publicly Traded
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.