Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

War of Attrition: AWS vs. Google, IBM and Microsoft Azure

7,486 views

Published on

In 2006 Amazon unleashed an IaaS and PaaS blitzkrieg called AWS. By the end of 2013 AWS captured a third of the IaaS and PaaS market territory by opening new product fronts, and launching pricing offensives almost daily. AWS looked invincible. But in 2014, superpowers Google, IBM and Microsoft declared war on Amazon AWS with massive resources available to throw at what is sure to be an epic war of attrition.

This industry brief illustrates the extent of AWS’s first mover advantages, the resources which Microsoft, Google and IBM have to do battle, and four scenarios which will define victory and defeat for the combatants. It’s up to you to select which scenario will come true.

Published in: Technology
  • Follow the link, new dating source: ❤❤❤ http://bit.ly/2ZDZFYj ❤❤❤
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Dating for everyone is here: ❶❶❶ http://bit.ly/2ZDZFYj ❶❶❶
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • I liked it!.... STARTUPS...Send your pitchdeck to over 5700 of VC's and Angel's with just 1 click. Visit: Angelvisioninvestors.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

War of Attrition: AWS vs. Google, IBM and Microsoft Azure

  1. 1. First Mover Advantage $4.0 $1.0 $0.8 $0.5 $- $1.0 $2.0 $3.0 $4.0 $5.0 AWS Microsoft IBM Google 2014 Revenue 2014 Market Share 30% 8% 7%4% 51% AWS Microsoft IBM Google Others Ready for battle 6% 1% 1% 2% 0% 5% 10% Google IBM Microsoft AWS % of Company Revenue Debt Victory and defeat #1 Everyone Advances at 2014 Growth Rates Free Cash Flow Cash #2 New Borders Drawn after 3 Years #3 Amazon Supply Lines Run Out Iaas Paas War of Attrition In 2006 Amazon unleashed an IaaS and PaaS blitzkrieg called AWS. By the end of 2013 AWS captured a third of the IaaS and PaaS market territory by opening new product fronts, and launching pricing offensives almost daily. AWS looked invincible. But in 2014, superpowers Google, IBM and Microsoft declared war on Amazon AWS with massive resources available to throw at what is sure to be an epic war of attrition. This industry brief illustrates the extent of AWS’s first mover advantages, the resources which Microsoft, Google and IBM have to do battle, and four scenarios which will define victory and defeat for the combatants. It’s up to you to select which scenario will come true. The bottom of this Industry Brief brings your attention to companies from China and India which haven’t showed up on the global IaaS | PaaS market share radar…yet. Off the Radar We estimate in 2014 AWS generated $4 billion in revenue for Amazon from Iaas and Paas, on 40% year over year growth. The main challenger, Microsoft, doubled its revenue to $1 billion. Can Microsoft, IBM or Google catch AWS? It’s taken AWS 8 years to grab almost a third of the IaaS and PaaS market. The 51% of the market occupied by “Others” is sure to be invaded by the big guys in the years ahead. But which of the big guys? Getting ready for battle means being willing and able. Amazon is most willing because IaaS and PaaS revenue from AWS is 6% of Amazon revenue and expected to grow. Debt sucks cash that could be invested in the war effort. IBM is saddled with the most debt, and this could emerge as a key factor in their ability to sustain an offensive. Cash is King and Microsoft free cash flow outstrips the others by a mile. All the competitors can outspend AWS to catch up if they choose to. Need to buy a Rackspace to catch-up faster? Microsoft and Google can put down a few $billion without breaking a sweat. Hyper growth never lasts more than a few years. But if it did, and Microsoft experienced 128% growth every year, They would pass AWS in 2017 on their way to over a trillion dollars in annual revenues. IBM would pass AWS in 2020 if they sustained their 2014 growth rate. Microsoft experienced 128% year-over-year growth in 2014, while AWS saw 40% growth. If we take down all their growth rates by 15% per year, Microsoft passes AWS in 2018 on their way to becoming the first and only $100B IaaS and PaaS provider. IBM passes AWS in 2022. $3 $20 $35 $5 $- $20 $40 Google IBM Microsoft AWS $2 $27 $8 $11 $- $10 $20 $30 Google IBM Microsoft AWS $7 $89 $11 $62 $- $50 $100 Google IBM Microsoft AWS IaaS and PaaS are taking off in China and India, the two most populous countries on the planet. That means we can expect to see them soon on the industry radar scanning for global leaders. 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Microsoft 1 2 5 9 17 28 43 64 91 122 Google 1 1 1 1 2 2 3 3 4 4 IBM 1 1 3 4 6 9 13 16 20 23 AWS 4 5 7 9 11 13 15 17 19 21 0 50 100 150 Microsoft Google IBM AWS #4 AWS Defends Its Territory Industry Brief In this scenario, Amazon shareholders revolt and force the company to scale back spending on AWS to generate profit. While growth of the competition slows at 15% per year, AWS decelerates faster on a trajectory that brings them to 10% annual growth by 2021. Microsoft pulls even in 2017, followed by IBM who passes AWS in 2022. If Amazon keeps innovating at the same pace they have the last eight years, this scenario could play out. Growth of their competitors is set on a trajectory leading to 10% annual growth by 2021. AWS is on path to higher than market 15% annual growth by 2021. If this happened, AWS wins the war of attrition and eight years from now generates more than double the revenue of their nearest competitor. www.worldstopdatacenters.com This industry brief is brought o you by World’s Top Data Centers, the superstore of information and tools for IT pros shopping for co-lo space and cloud services. If you like data about cloud data centers, check our top ten lists including, Top Ten Biggest sites in the World, by Region, Co-Lo, Hyperscale, or U.S. Government. 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Microsoft 1 2 5 12 27 62 140 320 730 1665 Google 1 1 1 2 2 3 5 7 11 16 IBM 1 1 3 5 10 18 33 62 115 213 AWS 4 6 8 10 14 19 27 37 50 69 0 1 10 100 1000 10000 Microsoft Google IBM AWS 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Microsoft 1 2 5 9 17 28 43 64 91 122 Google 1 1 1 1 2 2 3 3 4 4 IBM 1 1 3 4 6 9 13 16 20 23 AWS 4 5 7 9 11 13 15 17 19 21 0 20 40 60 80 100 120 140 Microsoft Google IBM AWS 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Microsoft 1 2 4 5 6 7 8 8 9 10 Google 1 1 1 1 2 2 2 3 3 3 IBM 1 1 2 3 4 5 6 6 7 7 AWS 4 5 7 9 11 13 15 18 20 23 0 5 10 15 20 25 Microsoft Google IBM AWS $Billions $Billions $Billions $Billions $Billions

×