2 years ago, Gartner predicted that at year-end 2016, more than 50% of Global 1000 companies will have stored customer-sensitive data in the public cloud. As companies strive to keep costs low yet remain innovative, a cloud computing strategy for IT makes sense. However, the challenge becomes choosing the right cloud service provider. And given that the market is littered with many (both large and small) cloud computing companies, this is no easy decision.
At NIC, a Los Angeles based IT managed service provider, we believe that in order to choose the right cloud service provider, the major consideration has to be a function of value, cost and security. Value is a function of the business, so it is critical that IT leadership engage the business before making a decision on which cloud provider to engage based on the needs of the organization. After these, then you can look at other considerations such as flexibility, specialization, location and support.
Who rules the cloud?
Presently, the two leading players in the cloud market are Amazon and Microsoft. According to Gartner’s 2015 Magic Quadrant for Cloud Infrastructure as a Service, only these two companies appear in the “Leaders” quadrant. Amazon continues to have a stranglehold on the market, with Synergy Research Group’s Cloud Services Infrastructure report for Q4 2015 showing their AWS cloud service with a market share of 31%. In the near term, I see Amazon continuing its grip on the market share, and although Microsoft is making some inroads, it is difficult to see the lead changing hands in the near future. As for the other players in the market like Google, Rackspace, IBM and CenturyLink, focusing on niche offerings and innovations would be the only way they will get anywhere near the top two.
Why choose Amazon?
Just this month, Salesforce announced they will be building some parts of their upcoming IoT cloud software on top of AWS. Amazon is renowned as the first mover in the cloud services space with the 2006 launch of Elastic Compute Cloud (EC2) for virtual servers and Amazon Simple Storage Service (S3) for file storage. The early revenues from developers from the likes of Airbnb and Netflix enabled the company to reinvest and develop more enterprise features and high performance capabilities. This makes the company be the reference standard for cloud services. And now, with new innovations annually increasing and over 1 million customers onboard, any organization looking for a cloud provider will have to look here for their first reference.
AWS supports a wide range of operating systems, gives a high deployment speed option through their Amazon Machine Images and Cloudformation Templates. They also offer a choice of 32 availability zones within 12 geographic regions around the world, allowing for data localization and low latency application as per any client requirements. In terms of cost, their options around switching between price plans and tiered pricing provide that extra flexibility that a business needs depending on their operating environment. It is tough picking out a weakness in their current offering (whether technology or price) so I have to admit that dethroning this king of the cloud will take a very unique revolution.
Why choose Microsoft?
A reference would be the Jenkins project who this month announced their migration from their own infrastructure. Microsoft boasts of being the only vendor positioned as a Leader across Gartner’s Magic Quadrants for Cloud Infrastructure as a Service, Application Platform as a Service, and Cloud Storage Services for the second consecutive year. It also supports hybrid applications that run between a client’s datacenter, other service provider locations and Azure itself, through Microsoft Azure Stack platform, making it a leader in Platform as A Service.
The reality is many organizations still use Windows or Microsoft Office software, .NET or Active Directory, moving to a cloud that has the same background is a safe bet due to the easier learning curve. In addition, by leveraging on Microsoft licensing discounts for enterprise applications like Office 365 and Microsoft Dynamics CRM, businesses will look at the Azure cloud service favorably from an overall cost saving perspective.
For me, familiarity is the primary driver for choosing Azure and I am sure that Microsoft will continue to leverage on its software users to choose Azure for a smoother transition to the cloud. But this won’t provide sufficient inroads into enterprise applications and this advantage will surely be eroded as new web apps appear on the scene.
Disadvantages of choosing the big boys?
If you are going to go AWS or Azure, the reality is that the contracts are usually non-negotiable for small sized organizations, and that is something that you have to live with if you don’t have leverage. In addition, there’s lack of end-to-end insights on how your service is performing on the public cloud, and limited flexibility or dedicated support. Azure won’t give you the smoothest ride if your enterprise solutions aren’t running on Microsoft software, and AWS has some complexity due to the scale of its offering.
These limitations, though not unique, will not stop the two main players from continuing to enhance their offerings, as well as leverage on their economies of scale to bring down pricing. For any other cloud service provider in the market, I believe that it is prudent they look to polishing their offerings around scaling, user management and integrating more third party providers into their environments.
Where to go from here?
A choice between AWS and Azure will be driven by an organization’s IT background and workload requirements. Of course references, particularly from third party partners, will be a huge influence. The two have made the choice even harder from a cost perspective and both continue to increase their level of innovative offerings and security enhancements.
To make the right choice for selecting a cloud service provider, why don’t you talk to us at NIC? Our many years of experience as a managed service provider will be invaluable to you as in selecting the right cloud for you. Contact us for affordable cloud services solutions that lend on-site server flexibility and control without the high costs of hardware, software, and personnel.