Today, AWS, Microsoft Azure, and Google Cloud Platform have occupied the majority of the global public cloud market, but companies at the bottom also hope to get a share of the public cloud market.
The current window to become a hyperscale cloud computing vendor is about to close, and IBM and Oracle are the two companies most likely to join this ranks.
The list of truly competitive public cloud computing providers has not yet been fully determined, but ambitious companies may need to work harder.
Amazon Web Services (AWS) and Microsoft Azure are industry giants in hyperscale public cloud as their services have expanded into more new areas of IT. Google Cloud Platform is also on the list. But after years of market volatility for large public and private clouds, only a handful of vendors are still trying to compete on a global scale.
Industry observers agree that there is still time for a few companies to challenge industry giants such as AWS, but their window is closing.
So, which company is no longer just a regional vendor, but can also enter the ranks of first-class public cloud vendors? Traditional IT suppliers IBM and Oracle have their own propositions and demands, as well as their own strengths and weaknesses. But some new vendors are hoping to carve out a niche and can find other relevant ways to enter the public cloud market without going the same route as the hyperscale cloud providers.
Alibaba's development in the public cloud market
Online retailer Alibaba is one of the most popular dark horses in the public cloud market. In recent years, its market share in the public cloud has increased significantly. growth, even though its market revenue is well below that of the largest companies. Alibaba Cloud was founded in 2009 and has more than 1 million paying users in 16 regions around the world. It has a strong foothold in China and opened its first cloud region in Europe in November 2016.
Frank Gens, an analyst at research firm IDC, said that in terms of infrastructure, IDC ranked Alibaba fourth among cloud computing service providers, but when considering higher-level services, Alibaba Baba was not among them. Alibaba must get better at this to compete in a public cloud market where hyperscalers hold the lion's share. Alibaba Cloud is not a real competitive threat in North America, but if it improves its services and strengthens these higher-level product developments, it may become a real threat to these industry giants.
What Oracle and IBM lack in the public cloud is exactly Alibaba’s advantage: experience in building and operating very large-scale facilities, which is a major component of being a large enterprise. AWS owns Amazon.com, Microsoft owns Xbox Live, and Google owns Search and Apps. Enterprises need this expertise and ongoing revenue to support hyperscale public cloud spending. David Mitchell Smith, an analyst at Gartner, a research firm, said that this is why Alibaba has become one of the largest online and offline service companies in the world, which will pose a potential threat to hyperscale cloud computing providers.
"The company is following Amazon's path and doing a lot of the same things they do," he said.
Alibaba also has an advantage: every large company is trying to gain a foothold in the Chinese market, which is a real challenge, and Alibaba already has a foothold in China.
Forrester Research analyst Dave Bartoletti said: "This will take some time, and as Amazon and Microsoft enter China, they will expand in the same way."
In the hyperscale world Competing with AWS is not the only way to find a place in the public cloud market with hyperscale cloud computing providers. Smaller companies, especially outside of North America, can do this by catering to customers who want a local presence, while others like DigitalOcean have successfully targeted developers. However, both methods may not be very effective.
The largest cloud computing providers will open data centers or cloud computing facilities in major countries around the world, and Amazon has a customer base of these small-scale manufacturers. Amazon Lightsail joined the market at the end of 2016 and is considered a direct competitor of DigitalOcean.
Other companies have found success by abandoning infrastructure entirely and instead selling products. Companies such as Salesforce, SAP and Pivotal provide platform-as-a-service products to many of the world's major vendors. These vendors compete in some ways with the hyperscalers but also work closely with them, as each has improved its integration offerings with AWS, Azure and Google Cloud Platform over the past two years.
At the same time, Virtustream also entered this market. It competes directly with AWS, Azure and other infrastructure players, but it has yet to join the race to add advanced features and global expansion to public clouds.
In 2015, EMC Corporation acquired Virtustream, an enterprise-focused startup that provides high-performance SAP workloads in colocation or hosted data centers without significantly increasing costs. This is still an important part of Virtustream's business, but the company has begun supporting most important enterprise applications without having to rewrite similar applications.
Forrester analyst Lauren Nelson said: "The value of Virtustream is that enterprises do not have to change applications, thus lowering the barrier to entry for scalability. Typically, specialized vendors compete with traditional hyperscale vendors. To compete with AWS, the other major cloud computing providers have relied on their own expertise to stand out: Google has launched its analytics and cognitive tools, while Microsoft has focused on its own. Workspace. But as hyperscale cloud providers work toward specialized use cases, these companies face real challenges. Larry Calabro, principal and cloud computing practice leader at Deloitte Consulting, said these companies typically work with all major public cloud providers.
“The momentum for public cloud computing providers continues to be about understanding who their customers are and who they want their customers to be,” he said. “Once you get beyond large-scale vendors, it’s all about service and detail. Any aspiring public cloud user should go this route instead of competing with the likes of AWS in the public cloud.
"I don't think every company has to do everything," said Smith, an analyst at Gartner. "They have to find where their true value lies, and their skills and their business model."