Amazon has long ruled the cloud – now it must fend off rivals
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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.
Besides I’m sure that AWS and Azure are some where in the right top corner of Gartner’s magic quadrant.
The problem is Google can’t make up the market share from only pressuring “lackey” companies that it has leverage over to use their cloud, it has to have a big scale draw for otherwise unaffiliated customers, and to a lesser extent can’t sustain these initial volume & bundling discounts indefinitely.
http://www.cloudcomputing-news.net/news/2018/may/30/office-3...
Also being the discount cloud provider is not an enviable position.
I think Google has done a huge push into education, that alone could reap significant gains in 18 months.
AWS SDKs, documentation and support for Windows/.Net Framework is excellent.
I’m not making any technical arguments against Azure. I haven’t used it besides what is now “Azure Devops”.
As far as Kubernetes. It’s inconsequential when a major corporation is considering which cloud provider to use. Most existing workloads on prem are not using k8s. That goes back to knowing how to meet the customers where they are and knowing how to do a “lift and shift” as phase 1.
https://medium.com/@cfatechblog/bare-metal-k8s-clustering-at...
Edit: Way past the getting-on-board stage, apparently. It had slipped my mind that the article I linked is from 18 months ago and already described an extensive rollout.
MS has decades of building relationships with large companies that it can leverage.
If Google’s only proposition is that it’s cheaper, any AWS Solution Architect can negotiate lower prices from AWS if they want to secure a client that’s large enough.
Also GCP already does have some large enterprise clients. Some of them have had a symbiotic relationship with them, working closely to create the features they need as they scale. That kind of treatment is hard to get with AWS where most enterprises would be small fry by comparison.
There are also enterprises that don’t want to be on Amazons stuff for reasons.
All you have to do is watch the thousand plus reinvent videos to know that AWS does work with many major companies. They also have an extensive partner network.
Microsoft is breaking apart what WAS Windows Server, into discrete managed services. Identity Services, File Services, etc. If you have a need for what was formerly Windows Server provided stuff, and youre rebuilding infrastructure, you would get a lot of compatibility from Azure. Then, as you need other compute and storage resources, youre building on top of a service contract you already have, instead of spreading your data all over the clouds.
Few people get to be CTO without knowing the politics and perceptions involved with dealing with corporate America.
That could be a case for startups but it is certainly not the case for established companies.
The job of a CTO of an established company is not piloting a formula 1 car. Rather, it is to prevent reckless technical decisions from taking an ocean liner and smashing it into an iceberg.
You also need to take into account the cost of changing and tuning your code to run on a TPU.
Oh and amazingly enough, I took the exact same Python file that I built on GPU on my workstation, ran it in Google Collab with a TPU connected, and I really only had to change the configuration to make it work. There was no need to change or tune anything. I was pleasantly surprised by how well that worked.
And let me rant a bit longer, when we started this project I actually first tried to use AWS because our company already had billing set up with them. But AWS was using CUDA 10.0 for SageMaker, which has a known crash- and nan-inducing bug for 2D convolution. AWS support being non-existent as always, we couldn't make things work on AWS and then went bare metal for our GPU training with hetzner.com - which simultaneously also shaved like $30,000 monthly off our bill. AWS's EC2 GPU instances are really expensive when compared to a dedicated root server.
MS recognized moving enterprises with boring workloads to Azure was where the money was along with hybrid computing. That’s how it was able to succeed so quickly.
Besides,Microsoft has always been focused on the dark matter developers doing boring stuff. Their tooling is far better than Google’s and their IDEs that developers are already using integrate with their cloud offerings.
Also, if the only advantage that GCP has is price, that’s not defensible. It’s not like it takes a great engineering effort to change a price.
The market leader can usually afford to be a “fast follower”. That was MS’s playbook for decades.
I posted a link earlier from a podcast interview of someone who works at GCP. She said that only a few small internal projects at Google run on GCP.
This was critical because by then if you weren’t on AWS, you probably didn’t have the DevOps team to do so - MS was now willing to lend you enough consultants to do it for you.
The number of spend shouldn’t be astronomically high. Most workflows in cloud computing are commoditized low-margin. It also explains why Google wants to do high-margin AI stuff, and why AWS is happy with low-margin areas.
Microsoft would say:
“If you have a workload that still requires Windows 2000 and SQL Server 2003. We will help you migrate it to Azure as is and we will extend your support contract.”
While Google will talk about migrating your entire workload to K8s.
Part of Microsoft's implied message in heavily marketing K8s is that they know GCP is heavily K8s-based, and know GCP is heavily competing with them on price, and they are counting on some of that "dark matter conversion work" wanting to move towards the "more portable solution" in order to "maybe when the moons are right eventually shift over to GCP or something cheaper than Azure". By offering that conversion path at all, and knowing Enterprise's weakness for sunk costs development over from-scratch rewrites, they are playing a very different game than what GCP can offer.
Even if you did everything in a “cloud agnostic” way, once you have even a couple of dozen VMs, your networking infrastructure and security rules, your user permissions, your DNS entries, your site to site VPNs, your client to site VPNs, all your data in databases, security and compliance audits etc. migrating your infrastructure is going to be a months long process, involving project plans, regression tests, and still have little to show for it.
I was involved in a much smaller migration as a dev lead when all we had to do was migrate to WorkDay for HR, payroll, and time tracking. That involved tons of integration work and hiring Workday consultants. Not to mention consolidating all of the other SAAS solutions that we had to integrate when we merged with another company.
It's why Azure's K8s strategy is so fascinating: precisely because the more they make it "cloud agnostic" on paper and are good K8s/Docker citizens the greater power they have for Manager mentality lock-in to the non-cloud agnostic stuff (especially "lift and shift").
Also, a huge amount of cloud costs are based on egress, so having it on one cloud saves you resources.
All the major cloud storage providers tout geo-replication so that if an earthquake or meteor takes out a datacenter there’s still other copies.
But nothing can protect against an administrative SNAFU where you - or your cloud provider - and accidentally or intentionally deletes your account and everything’s gone in an instant (yes, there’s usually recourse and backups to recover from - but that’s hours or days of downtime).
Sometimes it isn’t even the cloud provider’s fault: see Adobe’s blameshifting onto the US executive for their dropping all their Venezuelan customers.
While Azure has the “Black Forest” unit which is legally - and technologically - firewalled off the main Azure cloud - and you can also license Azure Stack for running many (most?) of Azure’s platform on-prem or self-hosted, I haven’t seen similar offerings from AWS or Google.
To your point though, yes there is business risk of having it on one cloud.
The trick is to buy both MSFT and AMZN, and relax!
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.
I am however fairly pessimistic about their chances. Especially considering the person at the helm is ex-Oracle VP.
I also don’t understand their alternatives... do they want AWS to own the cloud market? They’ve operated Android as the bulwark against Apple, why not view GCP in a similar light?
Android has a lot more synergies with their consumer ads business. It's the extreme version of writing your own browser.
GCP is completely different; it's in the B2B space, and it's a pretty standard business relationship between businesses and a supplier. Being customer-focused and business-focused isn't in Google's DNA.
On GKE, you don't need to define node-pools if you tick enable node-autoprovisioning. This is effectively an EKS fargate profile without any of the limitations (discrete node size, inability to mount volumes etc)
On GKE there's no need for bastion hosts, you can connect to private nodes automatically by tunneling through identity-aware-proxy
On GKE, there's no faffing about with aws-auth-configmap, nodes automatically join the cluster
On GKE, you can use regional persistent disks if you need to store state rather than single zone EBS
On GKE, you can use a single static ip for your nginx-ingress load balancer without needing to faff about with AWS global accelerator (which in any case gives you multiple ips)
On GKE, managed node pools are automatically repaired and upgraded with the choice of google's OS or ubuntu unlike Amazon Linux which is currently the only choice for EKS' managed node pools. GKE can automatically use spot instances unlike the farce on AWS with a 3rd party (spotinst) charging a premium for the same functionality
On GKE, managed istio is ticking a box versus a self-install on EKS
On GKE you need to worry much less about ip exhaustion as they use alias ips vs dedicated ENIs for EKS
Associating IAMs with kuberenetes service accounts is much easier with GKE workload identity than with EKS' oidc webhook
GKE has several features which EKS doesn't (calico, vertical pod autoscaling, binary authorisation, export of cluster data to bigquery)
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. :)
They could still make money by being far more efficient when running their software natively on their own stack.
API compatibility is not the biggest blocker to changing clouds -- moving one's data is.
The could work out a deal where outbound data from Google to AWS is free, but that probably wouldn't be in their best interests either.
I think their strategy of being the best place to run K8s is a good one. If you standardize on K8s you can run on any cloud, and they want to be the best place to do that.
Still have the data problem though.
> 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.
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...
Corporate leaders set stretch goals all the time -- that's part of their job. Not meeting them just means certain VP's might not get their full million-dollar bonuses -- not that a billions-dollar business will shutter and lay off 1000's of people.
It is all their own fault though I think: They worked long and hard to build that reputation.
https://www.lastweekinaws.com/blog/google-cloud-is-probably-...
Commercial cloud revenue, which includes Microsoft Office 365 Commercial, Microsoft Azure, the commercial portion of LinkedIn, Microsoft Dynamics 365, and other commercial cloud properties, increased 43% to $38.1 billion.
The first step of a major cloud migration is often a combination of hybrid solutions and lift and shifts.
Revenue is inconsequential. What is there profit? Cloud is profitable for AWS and MS. We don’t know what the margins are for GCP.
And in what universe is revenue inconsequential? Profit comes whenever you want to stop investing in growing. There is zero reason to believe that Google will be unable to turn a profit off GCP whenever it decides to. Particularly given that it was building datacenters for Search before AWS even existed.
GCP and Google are completely different. Nothing except a few inconsequential internal Google apps run on GCP.
Building servers and knowing how to address the needs of the enterprise are completely orthogonal.
Sorry the only citation I have is a podcast.
But balloons to deliver internet in rural areas? They're the leader in that space.
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
* 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...)
I didn't think the cloud revenue split was public knowledge.
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.
The cloud tools do not usually have real parity or interop with other cloud tools as claimed (eg interop with boto or s3), many gcloud utilities have way worse performance and memory issues, the docs are plastered with up-selling ads and, inconsistent service account auth vs IAM-style user auth issues, and on top of all that, there is this risk Google shuts it down.
Even if they don’t shut down GCS or GKE core stuff, there are so many peripheral products like managed big data solutions, Cloud Functions, etc., that seem like _classic_ cases where Google will abruptly shut them down.
That memo was just the final nail the GCP coffin. Google wouldn't care a second about you, so why should you give them your business?
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.
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"?
[0] https://www.lastweekinaws.com/blog/google-cloud-is-probably-...
> [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.
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.
looking at the history i'd say it is in MS DNA to be the successful second. In many instances they overtook the first.
However, in everything after that very first stage they were an amazing second mover: DOS, Word, Excel, etc. And now Azure.
To Microsoft's credit they maximized this advantage very well.
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.
That being said, they've been closing the feature gap, and have shown themselves able to pick up large contracts (controversy over JEDI notwitstanding), so the market certainly seems more competitive than a couple of years ago.
As for factoring discounts etc. into cloud numbers, I confess that I don't have a good answer.
> Azure runs Office 365, Exchange, Bing, and Xbox Live assets as well
I didn't take "runs [...] assets" to mean runs the entire thing.
IIS was always a good web server. Classic ASP had unique ways of shooting yourself in the foot... but so does everything else. And in those olden days a retail box of NT Server barely cost more than a Stronghold license.
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.
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.
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.
Most businesses like to keep as much of their money as they can. They can use it to pay people and stuff.
10% savings is almost never worth engineering effort. Those engineers are probably worth more than 10% by implementing features or fixing a bug for a customer.
However, even if 10% savings is $1 million, the edge odds probably still aren't in your favor. You may burn engineering time and the project fails or takes 3 times as long. Those engineers are effectively "dead" during that time and whatever contribution they could have made elsewhere is lost. For some reason, nobody ever factors that into their "savings projections".
Obviously, if I've reached the point that 10% savings is $10 million, I'm in a different bucket. But having $100 million in cloud spend probably indicates a lot more problems than AWS vs GCP.
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."
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-...