The Battle for Cloud Infrastructure Supremacy Rages On

Who will win the war for the cloud? Microsoft, Google, and Amazon are battling to the death.

Feb 25, 2014 at 8:30PM

This story originally written by Ron Miller at CITEworld. Sign up for our free newsletter here.

There is a two-pronged battle going on today for the soul of the cloud. It involves a struggle for cloud infrastructure supremacy and control of the network pipes, and it involves many of the biggest names in tech, from old (IBM, Microsoft (NASDAQ:MSFT)) to new (Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL)). As organizations move more data center infrastructure to the cloud, the results of these battles will have a profound impact on your business.

Like every other technology battle we have witnessed over the last 25 years -- whether it was AOL, CompuServe, and Prodigy in the early early '90s; Netscape versus Internet Explorer in the browser wars in the early days of the Web; or the ongoing client computing platform battle among Apple, Microsoft and Google -- the story is the same. We have several dominant players trying to be the one company.

For now, Amazon maintains a sizable lead in the cloud infrastructure business. In fact, some have suggested that Rackspace, unable to compete, could be a takeover target soon.

The Xamarin Maneuver: How Microsoft can win the app store game

But Amazon can't rest easy. Last year IBM bought SoftLayer, an infrastructure-as-a-service (IaaS) provider that gives it serious chops, so much so it actually landed in second place in revenues behind AWS with 7% of the market, based on numbers provided by Synergy research group. Even if you lump IaaS and platform-as-a-service (PaaS) numbers together, Amazon appears to have a sizable lead despite its lack of PaaS offerings.

IBM is trying to make a play for a bigger share of that market using their brand and marketing clout to deliver more customers, but Sharon Wagner, the CEO of cloud analytics and optimization company Cloudyn, thinks Google represents the real threat to Amazon's dominance. He believes Google can leverage its worldwide data centers and parlay that into a serious IaaS business.

Ray Wang, who is a principle at Constellation Research isn't so sure. He told CITEworld that both Microsoft with its Azure platform and Google have the infrastructure to give AWS a run for its money, but he wonders if they had the ability to shift their primary focus, what he called changing their DNA, to make it happen. He wasn't completely convinced they could.

Meanwhile we have the infrastructure players like Verizon weighing in, specifically with Terremark, but in spite of Verizon's networking clout, it so far hasn't made a dent in AWS's market share. In fact, Seeking Alpha, quoting Gartner's Lydia Leong said that very often when Verizon and AWS shared customers, AWS was winning new projects.

"Many Gartner clients now actually have multiple incumbent providers (the most common combination is AWS and [Verizon's] Terremark), but nearly all such customers tell us that the balance of new projects are going to AWS, not the other providers," Leong told Seeking Alpha.

Meanwhile we also have an Internet networking battle brewing as Comcast and Verizon try to control the Internet pipes, which are the means for delivery of all cloud services. If you doubt it, consider reports this week suggesting Verizon was in fact throttling Netflix streaming video, and...wait for it...Amazon Web Services. Comcast is also accused of this, and as a Comcast subscriber, I can say I have noticed Neflix slowing down over the last several months.

While IaaS providers battling for your company's cloud dollars, and network providers battling for control of the pipes might not be the same, they are certainly related and well worth watching as you switch more of your business to the cloud. Eventually a clear winner might emerge, proving one of the pundits right and making your buying decision easier. Until then, it's watch and wait.

More advice from The Motley Fool

Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980's, before the consumer computing boom. Or purchasing stock in e-commerce pioneer in late 1990's, when they were nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play", and then watch as it grows in EXPLOSIVE lock-step with it's industry. Our expert team of equity analysts has identified 1 stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


The Motley Fool recommends, Google, Netflix, and Rackspace Hosting. The Motley Fool owns shares of, Google, International Business Machines, Microsoft, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information