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Which cloud provider will take 2nd place Google Cloud or Microsoft Azure?

Cloud computing in 2020 is more mature, going multi-cloud, and likely to become more focused on vertical and a sales ground war as the leading vendor’s battle for market share. 

Picking the top cloud services provider isn’t easy given that the answer — much like enterprise software and IT in general — boils down to “it depends.” Whether it’s Amazon Web Services, Microsoft Azure, and Google Cloud platform in infrastructure as a service, or IBM, Dell Technologies, Hewlett-Packard Enterprise, and VMware in multi-cloud hybrid deployments, there are multiple variables for each enterprise. Ditto for software as a service, where the likes of Salesforce online training, Adobe, and Workday battle SAP and Oracle, an infrastructure- and database-as-a-service player. 

That said, a few key trends are emerging for cloud computing in 2020 that have shifted from 2019, 2018, and 2017. 

At a high level:

  • Multi-cloud is both a selling point and an aspirational goal for enterprises. Companies are well aware of vendor lock-in and want to abstract their applications so they can be moved across clouds. The multi-cloud theme is being promoted among legacy vendors that have created platforms that can plug into multiple clouds — often with a heavy dose of VMware or Red Hat. (See: Multi-Cloud: Everything you need to know about the biggest trend in cloud computing)
  • The game is about data acquisition. The more corporate data that resides in a cloud the more sticky the customer is to the vendor. It’s no secret that cloud computing vendors are pitching enterprises on using their platforms to house data for everything from analytics to personalized experiences. 
  • Artificial intelligence, analytics, IoT, and edge computing will be differentiators among the top cloud service providers as will serverless and managed services. The market share grab has largely gone to AWS, which was early, adds services at a rapid clip, and is the go-to cloud service provider. AWS’ ability to upsell to AI, IoT, and analytics will be critical.  Microsoft Azure training is also looking to differentiate via AI and machine learning. Google Cloud Platform has gained ground due to its machine-learning know-how. 
  • Sales tactics that play to fear, uncertainty, and doubt will be the norm. Toward the end of 2019 — not surprisingly right around AWS re:Invent –there appeared to be a mindshare battle in the press as the big three sniped at each other across multiple industries. (See: What is cloud computing? Everything you need to know)

With that backdrop, let’s get to the 2020 top cloud computing vendors. 

Disclosure: ZDNet may earn a commission from some of the products featured on this page. ZDNet and the author were not compensated for this independent review.

Infrastructure as a service Amazon Web Services:

AWS was the first cloud computing and offering infrastructure as a service in 2008 and has never looked back as it launches new services at a breakneck pace and is creating its own compute stack that aims to be more efficient and pass those savings along. AWS has expanded well beyond cloud compute and storage. If processors based on Arm become the norm in the data center, the industry can thank the gravitational pull of AWS, which launched a second-generation Graviton processor and instances based on it. If successful, the Graviton and the Nitro abstraction layer can be the differentiator for AWS in the cloud wars. 

In the fourth quarter AWS delivered revenue of nearly $10 billion to put it on a $40 billion annual revenue run rate. 

At AWS re:Invent 2019, CEO Andy Jassy outlined a vision for the cloud service provider, including its artificial intelligence service, a stack made for analytics and a bevy of purpose-built databases. The broader message from Jassy, however, was that AWS will be relentlessly innovating. Jassy also took a few thinly veiled jabs at rivals like Microsoft. 

Must read:

  • AWS: The complete business guide to Amazon’s cloud services 
  • Cloud alters pecking order among enterprise technology vendors

Jassy criticized Microsoft’s licensing practices and said its rival is “not prioritizing what matters to you guys, the customers.” He wasn’t necessarily targeting Azure online training Hyderabad with his comments, but Microsoft licensing changes that limit how businesses can deploy Windows and SQL Server in the cloud with existing licenses. In addition, Jassy touted that more than half the Windows installations in the cloud run on AWS. 

Another thread in the Amazon-Microsoft rivalry. The Pentagon awarded its $10 billion JEDI cloud computing contract to Microsoft over AWS. Amazon is appealing. 

While these sideshows make for good headlines, the upshot is that AWS wants a larger portion of the enterprise IT cloud-spend. AWS has hybrid cloud partnerships with the likes of VMware, developers, ecosystem, and large enterprise customer base to remain in the lead. Simply put, AWS is the profit engine of Amazon and on a run rate pushing $40 billion a year. Nevertheless, the rhetoric between AWS and cloud rivals is likely to get a bit chippy in 2020. 

Jefferies analyst Brent Thill noted that AWS contributes about $10 billion of high margin incremental sales a year to Amazon. Those incremental sales are more than Azure and Google Cloud Platform deliver combined. In addition, AWS margins are pushing 30% and driving operating profit for Amazon. Indeed, AWS accounts for the bulk of Amazon’s operating profit. 

Here’s what you need to watch with AWS in 2020. 

  • The buildout of AI and machine learning services. AWS has the parts to be a de facto cloud machine learning stack with SageMaker and use cases all the way to the call center.
  • Development of 5G, cloud, and edge computing use cases that tie in AWS. A partnership with Verizon on 5G is likely to be a test case to move AWS’ compute nodes toward the edge. 
  • How many AWS customers use the Graviton2 stack and therefore Arm. 
  • The momentum of AWS serverless instances. (See: What serverless architecture really means, and where servers enter the picture)
  • How AWS navigates multi-cloud deployments. 
  • The vertical market battle against Azure and Google Cloud. All three are aiming for health care, but retailers are looking to Azure and Google Cloud. 
  • Expansion into software as a service, the largest part of the cloud pie. 
  • The proliferation of AWS’ databases, access points, and data lake play with Redshift.

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