Working in the cloud space is an amazing ride. We see changes happening in monthly increments. At times we’re sitting around and talking about functionality we’d like to see in the cloud space and then four to six months later, it’s here. Sometimes not exactly how we envisioned it but often times getting the job done just the same. It’s a wild, exhilarating, and sometimes frustrating time to be in IT as a business. We, as consultants, are tasked with helping our clients best utilize the cloud to achieve their goals. Whether those goals are faster dev ops, financial breathing room to make a bold move, or to offload tedious workload expectations from their IT staff by migrating those tasks to the cloud.
An observation I’ve made and heard more about lately is that we, in the cloud arena, are seeing a dichotomy start to present itself. Whether that schism continues or abates remains to be seen. Whether it persists is a question best asked in other places and venues. The split I’m seeing is between AWS and Azure. The yin and yang being AWS seems to be primarily successful for dev-ops shops while Azure is the primary choice for productivity goals and virtual infrastructure based organizations. I’m not here to say that either should be pigeonholed. Azure can and does run cloud-based workloads very effectively. AWS is able to host productivity VM’s. I’m more focused on this discussion on the observation that IT departments seem to be creating this specialization organically and not as sort of master plan.
Looking at the details it makes sense. Microsoft has owned the productivity space for decades with Windows desktop, Windows server, and Office products. AWS is the relative newcomer to having any sort of productivity or enterprise presence. It’s no secret that AWS offering a cloud-based alternative to on-prem hosted VM’s caught most by surprise. The tech is still arguably in its infancy. Once this opportunity was presented anyone who’s watching could tell you that if Microsoft threw its considerable bulk, resources, and market share behind creating a competitor they had a very good chance of being a formidable market competitor.
This is indicated by the latest market reports of Microsoft growing astronomically in the cloud market. Let’s consider this article from Forbes. This is an opinion article but it presents the last quarter revenues from Microsoft as well as revenue growth numbers. They are impressive. Revenue growth numbers such as FY17 Q3, 93%; FY17 Q4, 97%; FY18 Q1, 90%; and FY18 Q2 98%. That kind of growth indicates the market is still maturing and growing. AWS is a cash cow for Amazon as well. According to this CNBC article, AWS revenues grew 45% in the last quarter of 2017 and bested analysts estimates in the process. 5% of Amazon’s revenue growth came from this one portion of its business. All of this data indicates that AWS is growing quickly but it’s a sidebar to how quickly Azure. This is truly the decade of the cloud.
Which brings us back to the question as to whether AWS and Azure will be typecast. Will Azure be utilized more to promote and develop code taking over space where AWS currently is king of the mountain? Will AWS push more into productivity and virtual machine hosting? For this to happen I think Microsoft has to overcome the aversion some developers and their shops have to using and working with Microsoft products in general. This may be a legacy of Microsoft using its market share years ago to push changes that potentially made coders develop a distaste for Redmond’s products. I’d argue for AWS to make inroads into the enterprise productivity space they’ll have to make their VM’s much easier to manage from one screen ala HyperV and VMware. Administrators have been using this approach since virtualization began. It won’t change very soon. To displace Microsoft as the desktop productivity leader will be a tall order indeed. How long have we had free options to Office products? How widely are they adopted and used? Exactly. Good luck with that one. I’m not saying it can’t be done but if your product can’t create pivot tables where’s this really going?
All of this is going to depend on each company’s leadership. What will they focus on next? What business will they focus on for revenue growth? It’s hard to tell. Both companies are doing very well in their own spaces. Are they interested in butting heads in the marketplace or are they content to stay in their own pastures quietly grazing away and growing fatter as the market matures? It’s not news to anyone that the cloud revolution has just begun. The majority of firms are working towards some sort of cloud presence but are still unaware of how much the cloud can improve their business. Let’s sit back and see how these two cloud services evolve to meet that need.
By: Jason Ledford
Posted: 8/14/2018 10:30 AM
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