Friday, July 1, 2016

Microsoft Azure vs AWS


Cloud is the new war zone among tech titans.In fact it is not so new, it started a while ago but still far away from completion.  We classify cloud services into three

1)Software as a Service(SaaS)
2)Platform as a Services(PaaS)
3)Infrastructure as a Service(Iaas)

Software as a Service(SaaS)
SaaS offers pure end user applications as  a service. It is the most user friendly form of cloud. Enterprises can use Business applications as like we just use our gmail or dropbox. This is a more matured area compared to other services. Became famous by the introduction of which holds nearly 20% market share in ~25 billion CRM market. Today Microsoft Office 365 is the biggest player in this area which hold major share among Cloud Productivity suit. Oracle Cloud Apps, Microsoft Dynamics, Workday, Adobe Cloud,Google App for work,SAP etc are the other  major players in SaaS. But all of these doesn't fight neck to neck as they compete in totally different Software areas. But Some of them are competing. But  as a whole all these cloud services are growing in revenue as more on premise deployments are moves to cloud.

Platform as a Services(PaaS) & Infrastructure as a Service(Iaas)

 Enterprises always need custom made Software applications and Services which cannot be fulfilled by SaaS. The Infrastructure and Platform for Such Applications can be leased from the Cloud vendors like Amazon Web Services and Microsoft Azure. Google, Oracle, IBM, VMware all are other big players in this area.The importance of PaaS and IaaS is that, the leader in these areas will  become the next Microsoft or IBM or much beyond that. And those leaders will become the tech emperors. They will generate enormous amount of money which will make them capable of acquiring any major innovation.  Amazon Web Services is the 500 pound Gorilla in this space. They clearly got early advantage.Not only startups, but also multi billion enterprises like GE, Technology Services like Netflix, SaaS Vendors like Adobe and even Salesforce depends on AWS. So they are the #1 in market now. Many of the evangelists predicts Microsoft will overtake AWS considering the grip Microsoft have in Enterprise Software market. A recent survey conducted  by  Morgan and Stanley  among 100 CIOs indicates Microsoft Azure will overtake AWS in IaaS by 2019.

 As a long time Microsoft watcher I can say that Azure grows faster than any other Microsoft Cloud Services. I have been observing Microsoft customer story portal for a while. Azure gets at least 30%  more customers than Office 365 in the same period of time. As per Microsoft Azure Grows more than 100% every quarter compare to the quarter year over ago. Whereas AWS enjoys ~70% growth. But my best guess is Microsoft won't over take AWS as they have a huge early lead. Currently AWS have an annual revenue of  ~10 billion. Microsoft doesn't disclose their numbers but analysts say it is around 2 billion. Now if they grow in the same pace AWS will reach ~17billion after an year even if Microsoft Grows at 150% rate It will just reach to 5 billion. This statics clearly indicates that the Gap is growing like anything  and AWS will remain as the #1. But Microsoft can enjoy the #2 position and  with enough profitability. They Can even acquire other  SaaS vendors and utilize the unused data center spaces.

I am eagerly waiting for next Microsoft earnings call which will give a better picture. Whatever be, Amazon, Microsoft,IBM,Google, Oracle and VMware  will bring billions to their balance sheet from IaaS and PaaS.

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