With the massive size of the public cloud market, it’s reasonable to assume that there’s plenty of pie for each the top three vendors –Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure (Azure) – to get their fill.
But the truth is that they’re all battling to capture even larger slices. While this type of war has happened in other technology segments, this one is unique because the market is growing at 30-40 percent year-over-year.
Here are a few examples of the current ugly wars these vendors are waging against each other.
AWS is luring away Azure customers. Channel checks suggest that AWS is incentivizing clients to move their Windows workloads to Linux. The next step is to move their SQL Server workloads to other databases (e.g, PostgreSQL). Of course, it won’t stop there; there will be an entire migration strategy in place. And there have even been a few instances in which AWS has funded clients’ early PoCs for this migration along with the implementation partner.
Azure is pushing for AWS migration. It isn’t uncommon for many mid-sized implementation partners to make their client pitch solely on the fact that they can migrate AWS virtual instances to Azure and achieve 20-30 percent, or more, cost savings. It also isn’t uncommon for Microsoft to bundle a lot of its offerings, e.g., Office 365, to create an attractive commercial bundling for its broader cloud portfolio against AWS, which lacks an enterprise applications play.
GCP is pushing Kubernetes cloud and Anthos. GCP’s key argument against AWS and Azure is that they are both “legacy clouds.” The entire Kubernetes cloud platform story is becoming very interesting and relevant for clients. More so, for newer workloads, such as AI, Machine Learning, and Containers, GCP is pushing hard to take the lead.
Each of these vendors will continue to find new avenues to create trouble for each other. Given that Azure and GCP are starting from a low base, AWS has more to lose.
So, how will the cloud war play out? Three things will happen going forward.
Stack lock-in
The vendors have realized that clients can relatively easily move their IaaS, and even PaaS, offerings to another cloud. Therefore, they’ll push to make their clients adopt native platform offerings that cannot be easily ported to different clouds (e.g., serverless). While some of the workloads will be interoperable across other clouds, parts will run only on one cloud vendor’s stack.
Preferred partnership for workloads
While the vendors will acknowledge that implementation partners will always have cloud alliances, they’ll push to have preferred partner status for specific workloads such as database lift and shift, IoT, and AI. For this, most cloud vendors will partner with strategy consulting firms and implementation partners to shape enterprises’ board room agenda.
Migration kits
In 2018, Google acquired cloud migration specialist Velostrata. This year, both AWS and Azure launched migration kits targeting each other’s clients. This battle will soon become even fiercer, and will encompass not only lift and shift VM migration, but also workloads such as database instances, DevOps pipelines, application run time, and even applications.
With the cloud giants at war, enterprises need to be cautious of where to place their bets. They need to realize that working with cloud vendors will become increasingly complex, because it’s not only about the offerings portfolio but also the engagement model.
Here are three things enterprises should focus on:
- Ensure interoperability and migration: Enterprises need to make the cloud vendors demonstrate evidence of easy workload interoperability with and migration to other cloud platforms. They should also determine the target cloud vendor’s own native migration tool kits and services, regardless of what the selected implementation partner may use.
- Stress test the TCO model: Enterprises need to understand the total cost of ownership (TCO) of the new services offered by the cloud vendors. Most of our clients think the cloud vendors’ “new offerings” are expensive. They believe there’s a lack of translation between the offerings and the TCO model. Enterprises should also stress test the presented cost savings use cases, and ask for strong references.
- Get the right implementation partner: For simpler engagements, the cloud vendors are increasingly preferring smaller implementation partners as they are more agile. Though the vendors claim their pricing model doesn’t change for different implementation partners, enterprises need to ensure they are getting the best commercial construct from both external parties. For complex transformations, enterprises must do their own evaluation, rather than rely on cloud vendor-attached partners. Doing so will become increasingly important given that most implementation partners work across all the cloud vendors.
The cloud wars have just begun, and will become uglier going forward. The cloud vendors’ deep pockets, technological capabilities, myriad offerings, and sway over the market are making their rivalries different than anything your business has experienced in the past. This time, you need to be better prepared.
What do you think about the cloud wars? Please write to me at [email protected].
