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Talking the Cloud Business with Amazon CTO Werner Vogels

Talking the Cloud Business with Amazon CTO Werner Vogels | cross pond high tech | Scoop.it

In its relatively short eight-year life-span, there’s a lot we’ve come to know — and yet a lot more that we don’t — about Amazon Web Services.

When it launched in 2006, the idea of renting computing capacity on a pay-as-you-go basis was a new one. Fast-growing startup companies who might have struggled to keep their systems running if they launched a popular new Web service could suddenly have all the capacity they needed in minutes instead of months. AWS fundamentally changed how companies think about their computing infrastructure needs.

And while Amazon won’t say exactly how big a business it is as a percentage of its $74.5 billion in annual revenue, there have been many educated guesses. A new one out yesterday from Pacific Crest Securities — and noticed by Bloomberg Businessweek — estimates it’s a $5 billion business annually and on its way to approaching $7 billion next year.

If that estimate is accurate, and if we thought of AWS as a separate company, its growth rate after passing the $1 billion revenue mark would be second only to that of Google, and would have exceeded that of Microsoft, Oracle and Salesforce.com.

Against this backdrop, Re/code sat down recently with Amazon CTO Werner Vogels while he was visiting New York. Werner, along with Andy Jassy, is among the executives continuing the shakeup that AWS started in the enterprise IT world.

Another data point from the Businessweek story: If Amazon sold traditional hardware servers, it would rank number four by revenue behind Dell, IBM and Hewlett-Packard. In response at least two of those companies, IBM and HP have built up their own cloud computing services to try to take on Amazon.

IBM has been the most vocal about its response in recent months. Last year it spent $2 billion to acquire SoftLayer. It has since pledged to spend big to build out its data center footprint and is running most of its software applications. This week Big Blue said its combined public cloud services and cloud software business is on track to book $7 billion in revenue next year, which make it about as big as Amazon, though it’s an apples-to-oranges comparison.

When we spoke, Amazon had just announced Zocalo, a new document-sharing and collaboration service meant to complement its WorkSpace virtual desktop product and to compete with similar offerings from DropBox (notably an AWS customer) and IPO-bound Box.

Philippe J DEWOST's insight:

Amazon's cloud business may be 2nd fastest software company after Google, as - per @Werner - they are "in the business of pain management for enterprises."

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Scooped by Philippe J DEWOST
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Microsoft Joins Amazon and Google in Cloud Price War

Microsoft Joins Amazon and Google in Cloud Price War | cross pond high tech | Scoop.it

Microsoft slashed prices on several of its cloud computing services the company announced on Monday, following through on a standing promise to match Amazon Web Services, which made similar cuts last week.

The software giant made the announcement in a blog post by Windows Azure general manager Steven Martin, saying it will slash prices on various services by 27 percent to 65 percent. “We recognize that economics are a primary driver for some customers adopting cloud, and stand by our commitment to match prices and be best-in-class on price performance,” Martin wrote. The move coincided with Microsoft’s Build conference taking place this week in San Francisco.

It’s the latest move in what’s turning out to be a brisk price war for cloud computing services. Last week, Amazon announced a broad-based price cut on many portions of its Amazon Web Services by 36 percent to 65 percent. That came a day after Google slashed prices for its Google Cloud Platform from 32 percent to 85 percent.

Philippe J DEWOST's insight:

This is still very foggy : would this mean they have been "overcharging customers from Day 1" as DigitalOcean complains ?

Inbetween, one clear spot in the sky is the confirmed rise of OpenStack. It may soon be followed by an industrial, hardware based revolution with Open Compute yet this is another story... yet.

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Emmanuel HAVET's curator insight, April 2, 2014 3:52 AM

I agree with Philippe Dewost :

" one clear spot in the sky is the confirmed rise of OpenStack. It may soon be followed by an industrial, hardware based revolution with Open Compute yet this is another story... yet."