Until further notice, Amazon Web Services is the reigning public IaaS cloud leader. But deep-pocketed companies Microsoft and IBM are keeping the pressure on AWS with a flurry of announcements beefing up their clouds to close out the year.
IBM, which earlier this year committed to investing $1.2 billion in its cloud platform, is accelerating its roll-out of new data centers across the globe. Initially the company said it planned to open 40 cloud sites, but this week it announced that 48 are available, some of which are made available through partnerships with hosting providers like Equinix. The company claims robust enterprise adoption traction, reporting that its cloud division works with 47 of the top 50 Fortune 500 companies.
Microsoft, meanwhile, has continued the steady drumbeat of feature enhancements to its cloud in recent months. Its cloud strategy has seemingly been resurged with the ascension of Satya Nadella to lead the company, and its closing out 2015 by bringing some long-awaited features to its Azure cloud into general availability.
Constellation Research principal analyst Holger Mueller
Each of these competing providers has an uphill climb to catch AWS, analysts say, and they're fighting not only against themselves but providers like Google too. But, it's clear these companies are looking to play the IaaS public cloud game for the long haul, and they have the resources to do it.
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New IBM Cloud Data Centers were announced today in Frankfurt, Germany, Mexico City and Tokyo. In addition to those roll-outs, the company has new sites for its cloud platform in Australia, France, Japan, Singapore, The Netherlands and the US through the Equinix partnership. In January 2014, the company announced plans to spend $1.2B to build out 40 data centers; with the new sites brought online today, the company has 48.
What's with the data center construction? "They need to get more load to make it work," says Constellation Research principal analyst Holger Mueller. For cloud companies to build out massive IaaS clouds they need to buy a lot of hardware. The more hardware they purchase the better price they can get on it from original equipment manufacturers. Larger scale equals more savings; that could be a driving factor for IBM to be more aggressively pursuing a data center build out strategy than it initially envisioned. Companies like Amazon and Google already have a massive enough scale that they're adding new capacity at very low cost. That's a goal for IBM, Mueller predicts. IBM is getting enough customers to justify the investments too.
When announcing the new data center sites, IBM listed Lufthansa in Germany, Dow Water, WPP in the United Kingdom and Thomson Reuters as new customers this year. It's unclear how much these companies will be using cloud services though. Thomson Reuters, for example, signed a multi-year services agreement for IBM to provide "internal-facing IT support services" to support the company's mobile workforce.
Microsoft has had its own bustle of announcements. Earlier this month the company announced a handful of new features that are generally available, and others in preview. These include: new capabilities for secure connections between on-premises data and the company's cloud-based big data analytics tools, Power BI and Azure Machine Learning; new Azure Site Recovery backup features that allow VMs to be backed up to the service without using Windows Systems Center VM Manager; and new Active Directory compatibility that allows the cloud-based system to authenticate on-premises apps. All of these play to Microsoft's strength of being a hybrid cloud computing platform.
Perhaps most exciting for many Microsoft customers though will be new Azure SQL Database features which will make the cloud-based system almost fully compatible with SQL Server engine. Combined with new premium storage capacity designed to support I/O intensive workloads, Mueller says Microsoft is making Azure "ready for primetime."
Gartner analyst Kyle Hilgendorf says Azure still has a ways to go to catch AWS, but he says there are increasingly compelling reasons customers have chosen Azure over AWS. After another year of advancements to its platform, Azure could turn into a highly competent cloud offering.
AWS isn't sitting on the sidelines. Week after week after week the company updates some aspect of its cloud platform. Recently, for example, it restructured its Reserved Instance pricing, allowing customers to lock in lower rates for its Elastic Compute Cloud (EC2) servers if they commit to a long-term contract - this is actually how many enterprise companies are used to buying services from IT vendors. The company also has announced new features for managing on-premises workloads through its OpsWorks tool, it launched new Glacier cold storage pricing, and it updated it streaming analytics service Kenesis. That's not to mention the groundbreaking new features it rolled out at re:Invent, including an industry-first computational computing platform named Lamdba.
"AWS still has a huge lead," Mueller says. IBM and Microsoft are keeping the pressure on though. And 2015 will be a whole new year.