CLOUD WARS -- As businesses move beyond cloud experiments to deeply strategic deployments, the balance of power in the Cloud Wars Top 10 is shifting toward those tech providers that can move those business customers past the infrastructure phase and into the high-value realm of AI-driven competitive advantage.
While the vast majority of media attention in the cloud's early days has gone to the top providers of public-cloud IaaS—Amazon Web Services, Microsoft and Google—the next and vitally more strategic theater in the Cloud Wars will be software, particularly around the booming potential for AI, Machine Learning and Blockchain.
As a result, my latest Cloud Wars Top 10 rankings reveal some major changes at or near the top of this list of the world's most-powerful and most-influential cloud-computing vendors:
#1 Microsoft remains an absolute lock at the top due to four factors: its deep involvement at all three layers of the cloud (IaaS, PaaS and SaaS); its unmatched commitment to developing and helping customers deploy AI, ML and Blockchain in innovative production environments; its market-leading cloud revenue, which I estimate at about $16.7 billion for the trailing 12 months (not to be confused with the forward-projected $20.4 billion annualized run rate the company released on Oct. 26); and the extraordinary vision and leadership of CEO Satya Nadella.
#2 Amazon might not have the end-to-end software chops of the others in the Top 5 but it was and continues to be the poster-child for the cloud-computing movement: the first-moving paradigm-buster and category creator. I believe Amazon will make some big moves to bolster its position in software, and no matter how you slice it, the $16 billion in trailing-12-month cloud revenue from AWS is awfully impressive.
#3 IBM has leapfrogged both Salesforce.com (formerly tied with Amazon for #2 and now in the #4 spot) and SAP (formerly #4) on the strength of its un-trendy but highly successful emphasis on transforming its vast array of software expertise and technology from the on-premises world to the cloud. In so doing, IBM has quietly created a $15.8-billion cloud business (again on trailing-12-month basis) that includes revenue of $7 billion from helping big global corporations convert legacy systems to cloud or cloud-enabled environments. And like #1 Microsoft, IBM plays in all three layers of the cloud—IaaS, PaaS and SaaS—which is hugely important for the elite cloud vendors because it allows them to give customers more choices, more seamless integration, better cybersecurity, and more reasons for third-party developers to rally to the IBM Cloud. Plus, its relentless pairing of "cloud and cognitive" is an excellent approach toward weaving AI and ML deeply into customer-facing solutions.
#4 Salesforce.com falls a couple of spots from its long-time tie with Amazon at #2 but—and this will be the case as long as founder Marc Benioff is CEO—remains a powerful source of digital innovation and disruptive strategy. However, to remain in the rarified air near the top of the Cloud Wars Top 10, Benioff and Salesforce must find a way to extend their market impact beyond their enormously successful SaaS business and become more of a high-impact player in the platform or PaaS space. At this stage, it's simply not possible for Salesforce to become a player in IaaS, so Benioff needs to crank up the genius machine and hammer his way into top contention as a platform powerhouse.
#5 SAP has what all of the other cloud vendors would kill for: unmatched incumbency within all of the world's leading corporations as the supplier of mission-critical business applications that run those companies. It's also fashioned, under CEO Bill McDermott, powerful new partnerships with Amazon and Google to complement its long-standing relationships with IBM and Microsoft, all of which give customers a heightened sense of confidence that SAP will be willing and able to play nice in heterogeneous environments. Plus, SAP's HANA technology is now in full deployment across thousands of businesses, and as it takes root and SAP continues to rationalize its massive product portfolio around HANA in the cloud, SAP has a very bright future ahead of it in the cloud.
So the Cloud Wars are clearly intensifying—particularly among the five most-powerful players at the top—as business customers are fully embracing the cloud as the best and most-capable approach toward digital transformation.
----------by Nagababu
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