Cloud Competition is Heating Up

Right now there is a war raging for the cloud, and companies (big and small) are spending large amounts of money for control.

What happens when companies like Amazon, Google and Microsoft battle each other? We, as customers, all win. If you haven’t been following my coworker’s blogs, cloud computing is where companies or individuals can rent processing power or data storage as needed.

If you don’t think the cloud is already big, Microsoft’s cloud computing platform, Azure, handles 100 petabytes of data per day. So what’s a petabyte? Well, for example, one petabyte can hold 13.3 years of HDTV video. What can 50 petabytes, or about half of the data Azure handles a day, hold? The entire written works of mankind in every language from the beginning of recorded history!

Greenpeace researchers estimate that if the cloud were a country it would be sixth in the world of biggest consumers of electricity on the planet. The cloud is big money too. Amazon Web Services, which was one of the first to offer these services, made close to 4 billion dollars last year. Experts predict worldwide IT spending will grow to 2.1 trillion dollars in 2014.

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Google Cloud Platform Manager Greg DeMichillie said, “There will not be just one company that’s the cloud provider. There will be several.”

Amazon Web Services has been the leader since it was created in 2006 and as of now controls five times the computing power of the next 14 cloud providers…combined. Have you ever watched a television show or movie on Netflix? “Amazon has the chance of controlling the public cloud just like Windows controlled the PC environment for a long time,” says Marten Mickos, CEO of Eucalyptus.

Eucalyptus is a company that builds private clouds that can interface with Amazon’s public cloud. A few weeks ago, Microsoft cut prices on its cloud storage service by 65%. Google and Amazon Web Services followed suit by slashing their prices within the next few days. Some companies haven’t ruled out the possibility of cloud services dropping to zero.

Google alone has spent over $2 billion on data centers and equipment. It’s on track to spend over $10 billion per year on data centers.

Competition isn’t good for all businesses though. Smaller cloud service providers will either get bought up by the larger corporations or left in the dust (or cloud…pun intended).

Do you still have questions about cloud computing? We would love to chat!