COLUMN: Taking Down Amazon’s Public Cloud Business

Who will own the Infrastructure-as-a-Service or cloud market over the long term is still up in the air.

Amazon, the clear leader at this point, is losing market share, according to most estimates. But at a reported 48 percent to 51 percent share, depending on whose numbers you look at, it is roughly four times larger than Microsoft, its nearest competitor, which is sitting at around 13 percent, according to Gartner’s 2017 estimates, its most recent data.

Amazon and Microsoft are clearly serious about wanting to be leaders in what is already a $32 billion market, with some estimating it will reach $80 billion in just three years.

What is less clear is whether IBM and Google are willing to do what it takes to become forces in the market.

So far, at least, it seems unclear as to what IBM’s strategy is. Sure, it is plunking down $34 billion on Red Hat, but it’s not clear what that gets the company. IBM has yet to capitalize on its SoftLayer acquisition and if it follows through with its announcement that Red Hat will be run separately, how does this all come together and who is the cloud strategy leader within the blue walls?

At an estimated market share that is less than Google’s 3.3 percent, it has a lot of ground to make up and nobody seems to speak for the entire company on the subject. Google, on the other hand, is showing signs it is determined to make something happen—and quickly.

Former Oracle executive Thomas Kurian stepped in to take over Google Cloud from Diane Greene last November. Just three months later, Kurian seems to be putting forth a strategy with recent statements that he is on a sales hiring spree and more specifically is looking to add talent that talks the same language as the vertical market customers he wants to sell to. Could that mean channel partners?

Just what Kurian’s plans are for the strategic service provider channel that could drive sales further into the Fortune 2000 and midmarket remain to be seen.

But Kurian’s background and his early moves indicate he believes you have to ask for the business. Especially when Amazon and Microsoft are your top competitors.

All of this is going to shape up to be a battle worth watching and one in which the early winner, Amazon, has no guarantee of future dominance. Cloud services are easy to relocate, and if you can compete on security and price you can gain share.

More importantly, the cloud service provider brand is not what the end user sees when he or she logs on to the network. It’s not who they call when a system is down. Cloud services are essentially blind. It’s like gasoline. I know what I pay for it, but I never actually see it when I stick the nozzle in the tank. The brand the nozzle is attached to is largely meaningless because if the price is less across the street, it’s an easy switch.

Obviously, switching infrastructure suppliers is a tad more complicated. But given the relationship is generally through a strategic service provider that is going to do the heavy lifting in making the switch, it’s more a discussion around time to savings or break-even after the jump.

This market is anything but mature, and there remains an ability to gain share quickly with a ramped-up strategic service provider channel and the willingness to get out and lead. If Kurian steps forward with a solid plan and follows up with visibility in the market and a leadership voice none of his competitors have shown, Google just might be the player to watch in 2019.

BACKTALK: Make something happen. Robert Faletra is Executive Chairman of The Channel Company. You can contact him via email at rfaletra@thechannelcompany.com