Using market share along isn't a very good measure, because it hides that fact that they entire market is growing significantly, far outpacing the market share loss.
It's not that Microsoft is stealing customers from Amazon. It's that both companies are brining in lots of new to the cloud customers, and Microsoft is just doing it faster.
But both businesses are growing at enviable rates.
As a hypothetical CTO worried about the political consequences of failure when choosing a cloud provider, why would I choose GCP? If I choose AWS and things go wrong , I made the safe choice “and no one ever got fired for choosing AWS”. If I’m already running a MS shop, Azure is a safe political choice. Every time something goes wrong, even if it could have happen with any provider, you will always be questioned about why you chose GCP.
Besides I’m sure that AWS and Azure are some where in the right top corner of Gartner’s magic quadrant.
Note that MS might not do it faster in real numbers, just that percentage wise it's easier to grow when you're small. 15% of 20B is still a lot more than 30% of 2B (out whatever the real numbers are).
Didn't realize Google Cloud was so far behind in revenue and growth. Seems like it would be risky for companies to switch to Google Cloud because it might end up in the graveyard.
Google is unparalleled at building efficient data centers. Cloud already has tons of enterprise customers with contracts. They've spent $$$$$$ creating the infrastructure to be able to cash in over the long term.
Anyone who thinks Google will get out of Cloud (already more than an $8 billion business [1]), as if it were comparable to Reader (which made $0, AFAIK), isn't looking at the economic realities here.
I repeat: Google Cloud has more than $8 billion in annual revenue. And AWS proves that clouds are a profitable business.
I just can't understand how anyone can suggest with a straight face that Google might shut it down.
I worked for two shops that migrated to GCP, one from leased space in DCs, one from AWS.
> Seems like it would be risky for companies to switch to Google Cloud because it might end up in the graveyard.
Yeah, there's definitely that risk, and in one of those cases, I disagreed with the move because of it.
That said, depending on what you're doing, GCP's key-value store (BigTable) and analytical DB (BigQuery) struck me as technically more sound than the AWS versions (DynamoDB, Redshift/Athena). As an ecosystem, AWS was far superior, there are more offerings, and they tend to have more features. It's just that they're most likely a managed version of an open-source project.
One place moved specifically because of BigTable. They were on HBase (and not happy with it), so it was the least painful migration option.
I understand the narrative that's going to carry after that article the other day, but I've really enjoyed working with GCP over the last 2 years.
The structure for VM use and their Live Migrate capability for upgrading the hardware underneath with no downtime has been excellent on my more long-lived servers.
My biggest wish is some equivalent of Aurora for PostgreSQL.
Google really dropped the ball on missing cloud computing. With their expertise, they should have owned the space, it's just never the sort of idea that would bubble up in that org.
But balloons to deliver internet in rural areas? They're the leader in that space.
> Seems like it would be risky for companies to switch to Google Cloud because it might end up in the graveyard
It's sort of a Catch-22 for them. They are this far behind in part because people fear they might not be around long term, and they might not be, because people don't want to sign up, because they fear it might not be. :)
And what if some Google employees decide they don’t like your organization? Google has already demonstrated they will cave in to that kind of pressure. How can any non-trivial sized organization bet the farm on gcp after that?
My biggest takeaway from this article was that while Google publicly reports its "cloud" revenue (including GSuite revenue) as $8 billion a year, its cloud computing revenue (the portion that competes with AWS and Azure) is at $1-2 billion a year.
That would explain why Google would be willing to shut down Google Cloud in 2023 if they are not one of the top 2 players in this space. (Additional context and previous discussion below.)
Doesn't Microsoft do the same thing? The last revenue numbers I remember seeing from them were for some category called "Intelligent Cloud", which includes:
* Server products and cloud services, including Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, Microsoft Azure, and GitHub.
* Enterprise Services, including Premier Support Services and Microsoft Consulting Services.
Those resources should not be read as implying that there is any chance GCloud gets "shut down" in 2023 or 2033 or 2043 or anytime before the recognizable end of computing as a business. There are issues, to be sure, but this is not Reader.
Google maintains strategic leadership in infrastructure to efficiently run Ads. The ultimate addressable market in the cloud business is as large or larger than the ads business.
Cloud also is just getting into the middle game, where commodity storage/compute services start to give way to specialized and domain specific storage/compute/analytics/intelligence. Google has unique strengths there, and a number of opportunities/advantages vis a vis Microsoft/AWS.
But rather than dominating in Cloud, Google treats it as a hobby- like TV was for Apple for about a decade. Google can perfectly well continue to treat it like a hobby. They are well ahead technically, and have plenty of cash to maintain that leadership underneath Ads.
Those resources are reporting on the framing that- for the right leaders inside Google, there is an opportunity to turn their infrastructure capabilities from a strategic skillset into a leading business. That's all.
Maybe they will, maybe not. But even if they don't, there will be no "shutting down" on any near term time frame. Even as a hobby Cloud will be big enough to be alive for a long time.
This is nonsense, based on ignorance/misunderstanding blown out of proportion, compounded by a popular meme that's not actually applicable. But don't take my word for it, take the word of Corey Quinn, an AWS consultant who (I believe, maybe someone knows an earlier example) originally popularized the joke that Google might someday shut down GCP, and whose current dominant refrain is that Kubernetes will eventually fail and be abandoned.[0]
Nice how "theinformation" dumped this "article" out on dec 17 when, you know, everybody is going on vacation. Some of us are back now (as it turns out, I work in GCP, but I code).
I suspect there will be an official response to the response to this pile of crap at some point.
And speaking of crap, how do you get from "risk loss of funding" to "shut down"?
> That would explain why Google would be willing to shut down Google Cloud in 2023 if they are not one of the top 2 players in this space. (Additional context and previous discussion below.)
I don't see anything mentioning that Google will shut down GCP unit in 2023 - I see something saying that GCP unit will risk losing funding - presumably this is not quite the same thing. Losing funding to me would mean they will have to fund themselves on their own revenue.
>That would explain why Google would be willing to shut down Google Cloud in 2023 if they are not one of the top 2 players in this space.
I wonder how much of an effect this disclosure will affect the outcome?
I've used AWS heavily for work-related services and have touched GCP a few times for little side projects in the past. Knowing that they'd be prepared to shut down GCP if they're not market leader or market second within a small amount of time ensures I personally will never, _ever_ use them for enterprise work, and I'm sure I'm not alone in that.
It's actually a great testament to Microsoft's execution that they were able to catch up (to some extent at least), despite AWS having a seven year head start.
And this is against Amazon, which is known for execution. I suppose we're in for a fun couple of years, especially with the JEDI contract soap opera and all that.
Microsoft's great advantage is enterprise bundling. Not only do they already have sales relationships with every big IT shop in the world - they're selling both software and cloud (which means they can discount one or the other).
To Microsoft's credit they maximized this advantage very well.
Id argue Microsofts strong suit here is making themselves look competitive. During the web server wars Apache reigned supreme, until the numbers shifted in favour of IIS which overtook Apache for a time. Was this a better product Apache was fending off? no. Microsoft had paid hosting providers to park web domains and registrations on IIS servers so Netcraft would finger them as #1.
now we have Azure and its the same thing all over again. Azure Cloud has lots of tenancy, but these numbers I suspect are bogus. Azure runs Office 365, Exchange, Bing, and Xbox Live assets as well, and these are all "tenants." MS also bundles discounts for business critical things like desktop and server licenses into accepting Azure credits, so its likely many of these tenants are on paper only.
I think Microsoft leveraged their Office lock-in, additionally to luring some users with apps like one-note/one-drive.
I use Azure outside the US from central Europe and the performance of their cloud services is just terrible.
Personally, I don't really like the move to the cloud at all. The whole MS palette of services from the OS to Office doesn't really convince me.
I am surprised the cloud market is actually that small. Especially since classic hosting is just included. And a growth of ~250% compared to last decade? A decade is pretty long...
Our business "jumped" into the cloud because of the reliance on MS office products. It was not done out of love.
Financial inquire: I would like to see the breakout from MSFT on what is actual Azure revenue. That would be a good comparison with AWS on the revenue side. MSFT now includes the O365 entire suite and other SAAS products with their cloud revenue. Office is huge alone.
Also, genius tactic, MSFT gives you free SQL Server, Windows Server, and Exchange when you buy Azure credits. I have friends with expiring Azure credits coming up soon, waiting to see how MSFT handles. MSFT has massive cash, so prob extend for free or some other magic move.
Edit: For context, these are multi millions dollars in Azure credits, some 20M+, not being used.
Likewise, we run everything in DO and it's around 30% less so far, but we're also able to afford managed databases at that rate. To make them redundant will bring us closer to our AWS rates, but... I'm very happy to have managed services at the moment, and the value is felt both in productivity and finances. I'm really happy we moved over.
One thing to note is that the cloud is only about 5% of total IT expenditures. So getting data which has never been on the cloud is more important than taking data away from competitors.
So, there's a thing I wonder about cloud businesses, Amazon or anyone else's. How much of this is funded by businesses that are not profitable, but are running on VC money? I recall the IPO documentation for companies like Uber stating a stupendous amount of their $$ going for AWS.
I am reminded of Paul Graham's description of Yahoo's advertising business in 1999. Lots of paying customers, things seem great, you're solidly profitable. But what if most of your customers aren't profitable? What happens when the next recession comes?
Not saying cloud computing is going away, but I think its current apparent growth rates are being propped up by a lot of Softbank (and similarly unprofitable) investments, which will go away fast when the next recession comes. Until then, we don't really know how profitable cloud computing is as a business. It may not be as good as it looks right now.
Am using it at current client. It's very good. GKE is absolutely brilliant, and some of the other stuff is also great.
On the other hand, some stuff is not quite there yet. The metadata server to handle instance/pod IAM (i.e. Workload Identity) is wobbly at best. To be fair, it's in beta - but then most of their offerings seem to be - which then means you can't rely on it for business-critical applications since it may wobble at the wrong time and there's no SLA.
This is just one example off the top of my head - I'm on holiday and not making massive mental effort to remember work. :)
AWS is still my preferred cloud provider. Their APIs can be daunting at times and you have to build off many lower level concepts until you get something working but when you do it tends to be rock solid - and under your control. I prefer their approach of giving you the best lowest level services to build on, and then building on top of those themselves for those who want more abstraction than the Google way of "we're building something you'll want to use - we'll tell you when it's available but it will probably be another year or two until it's GA and covered by any SLA."
Here's the thing though, they actually don't have to fend off rivals. Amazon's cloud business is based on excess capacity that they have as one of the internet's biggest chokepoint in traffic (post-Thanksgiving holiday spending). When I took managerial accounting classes, we looked at situations where it would seem on paper that producing a certain good would lose money, but when you compared total profitability in letting excess capacity sit idle and distributing fixed costs like rent and overhead, you can actually sell a good for a loss. Amazon doesn't have to make more money than they spend on cloud computing, they only have to make more money than what they would have had to spend on cloud computing without competing on the market.
[+] [-] jedberg|6 years ago|reply
It's not that Microsoft is stealing customers from Amazon. It's that both companies are brining in lots of new to the cloud customers, and Microsoft is just doing it faster.
But both businesses are growing at enviable rates.
[+] [-] scarface74|6 years ago|reply
Besides I’m sure that AWS and Azure are some where in the right top corner of Gartner’s magic quadrant.
[+] [-] cjblomqvist|6 years ago|reply
[+] [-] WalterBright|6 years ago|reply
The trick is to buy both MSFT and AMZN, and relax!
[+] [-] cpgeier|6 years ago|reply
[+] [-] crazygringo|6 years ago|reply
Anyone who thinks Google will get out of Cloud (already more than an $8 billion business [1]), as if it were comparable to Reader (which made $0, AFAIK), isn't looking at the economic realities here.
I repeat: Google Cloud has more than $8 billion in annual revenue. And AWS proves that clouds are a profitable business.
I just can't understand how anyone can suggest with a straight face that Google might shut it down.
[1] https://www.sdxcentral.com/articles/news/google-cloud-annual...
[+] [-] dehrmann|6 years ago|reply
> Seems like it would be risky for companies to switch to Google Cloud because it might end up in the graveyard.
Yeah, there's definitely that risk, and in one of those cases, I disagreed with the move because of it.
That said, depending on what you're doing, GCP's key-value store (BigTable) and analytical DB (BigQuery) struck me as technically more sound than the AWS versions (DynamoDB, Redshift/Athena). As an ecosystem, AWS was far superior, there are more offerings, and they tend to have more features. It's just that they're most likely a managed version of an open-source project.
One place moved specifically because of BigTable. They were on HBase (and not happy with it), so it was the least painful migration option.
[+] [-] brightball|6 years ago|reply
The structure for VM use and their Live Migrate capability for upgrading the hardware underneath with no downtime has been excellent on my more long-lived servers.
My biggest wish is some equivalent of Aurora for PostgreSQL.
[+] [-] dehrmann|6 years ago|reply
But balloons to deliver internet in rural areas? They're the leader in that space.
[+] [-] jedberg|6 years ago|reply
It's sort of a Catch-22 for them. They are this far behind in part because people fear they might not be around long term, and they might not be, because people don't want to sign up, because they fear it might not be. :)
[+] [-] bradleyjg|6 years ago|reply
[+] [-] samspenc|6 years ago|reply
That would explain why Google would be willing to shut down Google Cloud in 2023 if they are not one of the top 2 players in this space. (Additional context and previous discussion below.)
[1] The Information: https://www.theinformation.com/articles/google-brass-set-202...
[2] Discussed on Hacker News previously: https://news.ycombinator.com/item?id=21815260
[+] [-] SpicyLemonZest|6 years ago|reply
* Server products and cloud services, including Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, Microsoft Azure, and GitHub.
* Enterprise Services, including Premier Support Services and Microsoft Consulting Services.
(https://www.microsoft.com/en-us/Investor/earnings/FY-2019-Q3...)
[+] [-] jonahbenton|6 years ago|reply
Google maintains strategic leadership in infrastructure to efficiently run Ads. The ultimate addressable market in the cloud business is as large or larger than the ads business.
Cloud also is just getting into the middle game, where commodity storage/compute services start to give way to specialized and domain specific storage/compute/analytics/intelligence. Google has unique strengths there, and a number of opportunities/advantages vis a vis Microsoft/AWS.
But rather than dominating in Cloud, Google treats it as a hobby- like TV was for Apple for about a decade. Google can perfectly well continue to treat it like a hobby. They are well ahead technically, and have plenty of cash to maintain that leadership underneath Ads.
Those resources are reporting on the framing that- for the right leaders inside Google, there is an opportunity to turn their infrastructure capabilities from a strategic skillset into a leading business. That's all.
Maybe they will, maybe not. But even if they don't, there will be no "shutting down" on any near term time frame. Even as a hobby Cloud will be big enough to be alive for a long time.
[+] [-] dodobirdlord|6 years ago|reply
[0] https://www.lastweekinaws.com/blog/google-cloud-is-probably-...
[+] [-] rossjudson|6 years ago|reply
I suspect there will be an official response to the response to this pile of crap at some point.
And speaking of crap, how do you get from "risk loss of funding" to "shut down"?
[+] [-] ailideex|6 years ago|reply
> [1] The Information: https://www.theinformation.com/articles/google-brass-set-202...
I don't see anything mentioning that Google will shut down GCP unit in 2023 - I see something saying that GCP unit will risk losing funding - presumably this is not quite the same thing. Losing funding to me would mean they will have to fund themselves on their own revenue.
[+] [-] haecceity|6 years ago|reply
[+] [-] Crash0v3rid3|6 years ago|reply
I didn't think the cloud revenue split was public knowledge.
[+] [-] cmdshiftf4|6 years ago|reply
I wonder how much of an effect this disclosure will affect the outcome?
I've used AWS heavily for work-related services and have touched GCP a few times for little side projects in the past. Knowing that they'd be prepared to shut down GCP if they're not market leader or market second within a small amount of time ensures I personally will never, _ever_ use them for enterprise work, and I'm sure I'm not alone in that.
[+] [-] smiljo|6 years ago|reply
Bezos himself called this a business miracle (the seven year head start, that is): https://youtu.be/f3NBQcAqyu4?t=2133
And this is against Amazon, which is known for execution. I suppose we're in for a fun couple of years, especially with the JEDI contract soap opera and all that.
[+] [-] jwilliams|6 years ago|reply
To Microsoft's credit they maximized this advantage very well.
[+] [-] nimbius|6 years ago|reply
now we have Azure and its the same thing all over again. Azure Cloud has lots of tenancy, but these numbers I suspect are bogus. Azure runs Office 365, Exchange, Bing, and Xbox Live assets as well, and these are all "tenants." MS also bundles discounts for business critical things like desktop and server licenses into accepting Azure credits, so its likely many of these tenants are on paper only.
[+] [-] trhway|6 years ago|reply
looking at the history i'd say it is in MS DNA to be the successful second. In many instances they overtook the first.
[+] [-] raxxorrax|6 years ago|reply
I use Azure outside the US from central Europe and the performance of their cloud services is just terrible.
Personally, I don't really like the move to the cloud at all. The whole MS palette of services from the OS to Office doesn't really convince me.
I am surprised the cloud market is actually that small. Especially since classic hosting is just included. And a growth of ~250% compared to last decade? A decade is pretty long...
Our business "jumped" into the cloud because of the reliance on MS office products. It was not done out of love.
[+] [-] psaux|6 years ago|reply
Also, genius tactic, MSFT gives you free SQL Server, Windows Server, and Exchange when you buy Azure credits. I have friends with expiring Azure credits coming up soon, waiting to see how MSFT handles. MSFT has massive cash, so prob extend for free or some other magic move.
Edit: For context, these are multi millions dollars in Azure credits, some 20M+, not being used.
[+] [-] neonate|6 years ago|reply
[+] [-] trophycase|6 years ago|reply
[+] [-] steve_adams_86|6 years ago|reply
[+] [-] pasttense01|6 years ago|reply
[+] [-] rossdavidh|6 years ago|reply
I am reminded of Paul Graham's description of Yahoo's advertising business in 1999. Lots of paying customers, things seem great, you're solidly profitable. But what if most of your customers aren't profitable? What happens when the next recession comes?
Not saying cloud computing is going away, but I think its current apparent growth rates are being propped up by a lot of Softbank (and similarly unprofitable) investments, which will go away fast when the next recession comes. Until then, we don't really know how profitable cloud computing is as a business. It may not be as good as it looks right now.
[+] [-] enitihas|6 years ago|reply
[+] [-] NickKampe|6 years ago|reply
[+] [-] cassianoleal|6 years ago|reply
On the other hand, some stuff is not quite there yet. The metadata server to handle instance/pod IAM (i.e. Workload Identity) is wobbly at best. To be fair, it's in beta - but then most of their offerings seem to be - which then means you can't rely on it for business-critical applications since it may wobble at the wrong time and there's no SLA.
This is just one example off the top of my head - I'm on holiday and not making massive mental effort to remember work. :)
AWS is still my preferred cloud provider. Their APIs can be daunting at times and you have to build off many lower level concepts until you get something working but when you do it tends to be rock solid - and under your control. I prefer their approach of giving you the best lowest level services to build on, and then building on top of those themselves for those who want more abstraction than the Google way of "we're building something you'll want to use - we'll tell you when it's available but it will probably be another year or two until it's GA and covered by any SLA."
[+] [-] bsder|6 years ago|reply
[+] [-] 9nGQluzmnq3M|6 years ago|reply
[+] [-] shanjames|6 years ago|reply
[deleted]
[+] [-] c3534l|6 years ago|reply
[+] [-] cthalupa|6 years ago|reply
This meme needs to die. It is not true and it has never been true that AWS was built out of excess Amazon infrastructure.
https://www.networkworld.com/article/2891297/the-myth-about-...