
Amazon has long ruled the cloud – now it must fend off rivals - Bella-Xiang
https://www.wsj.com/articles/amazon-has-long-ruled-the-cloud-now-it-must-fend-off-rivals-11578114008
======
jedberg
Using market share along isn't a very good measure, because it hides that fact
that they entire market is growing significantly, far outpacing the market
share loss.

It's not that Microsoft is stealing customers from Amazon. It's that both
companies are brining in lots of new to the cloud customers, and Microsoft is
just doing it faster.

But both businesses are growing at enviable rates.

~~~
scarface74
As a hypothetical CTO worried about the political consequences of failure when
choosing a cloud provider, why would I choose GCP? If I choose AWS and things
go wrong , I made the safe choice “and no one ever got fired for choosing
AWS”. If I’m already running a MS shop, Azure is a safe political choice.
Every time something goes wrong, even if it could have happen with any
provider, you will always be questioned about why you chose GCP.

Besides I’m sure that AWS and Azure are some where in the right top corner of
Gartner’s magic quadrant.

~~~
jeffshek
GCP has a really strong ecosystem around AI. If you end up dealing with some
type of ML problem with absurd memory requirements, TPUs can be useful there.
A lot of recent Transformer architectures have these requirements.

Also, a huge amount of cloud costs are based on egress, so having it on one
cloud saves you resources.

~~~
DaiPlusPlus
> having it on one cloud saves you resources.

All the major cloud storage providers tout geo-replication so that if an
earthquake or meteor takes out a datacenter there’s still other copies.

But nothing can protect against an administrative SNAFU where you - or your
cloud provider - and accidentally or intentionally deletes your account and
everything’s gone in an instant (yes, there’s usually recourse and backups to
recover from - but that’s hours or days of downtime).

Sometimes it isn’t even the cloud provider’s fault: see Adobe’s blameshifting
onto the US executive for their dropping all their Venezuelan customers.

While Azure has the “Black Forest” unit which is legally - and technologically
- firewalled off the main Azure cloud - and you can also license Azure Stack
for running many (most?) of Azure’s platform on-prem or self-hosted, I haven’t
seen similar offerings from AWS or Google.

~~~
jeffshek
I’m biased toward my use case - but if I have to move a bunch of terabytes for
a ML data pipeline - I arguably am having stuff on GCP.

To your point though, yes there is business risk of having it on one cloud.

------
cpgeier
Didn't realize Google Cloud was so far behind in revenue and growth. Seems
like it would be risky for companies to switch to Google Cloud because it
might end up in the graveyard.

~~~
crazygringo
Google is unparalleled at building efficient data centers. Cloud already has
tons of enterprise customers with contracts. They've spent $$$$$$ creating the
infrastructure to be able to cash in over the long term.

Anyone who thinks Google will get out of Cloud (already more than an $8
_billion_ business [1]), as if it were comparable to Reader (which made $0,
AFAIK), isn't looking at the economic realities here.

I repeat: Google Cloud has more than $8 _billion_ in annual revenue. And AWS
proves that clouds are a profitable business.

I just can't understand how anyone can suggest with a straight face that
Google might shut it down.

[1] [https://www.sdxcentral.com/articles/news/google-cloud-
annual...](https://www.sdxcentral.com/articles/news/google-cloud-annual-
revenue-tops-8-billion/2019/07/)

~~~
djohnston
Because the mandate was to be top 2 by 2023 and that looks doubtful.

~~~
SpicyLemonZest
Mandates in a large company generally do not imply a threat to nuke the entire
organization if the mandate isn't met.

~~~
djohnston
In a large company, sure, but in Google? They nuke their own stuff all the
time, users be damned. Since AWS offers a larger ecosystem, and doesn't have
the Google product TTL of like 5 years, I really don't know why anyone would
use GCP unless they're going for multi-provider redundancy

~~~
dodobirdlord
Tired and bad meme is tired and bad. Why would prior evidence of Google
shutting down things that are not anything like GCP suggest that Google would
shut down things that are like GCP?

~~~
djohnston
How are they different? It's another Google product failing to meet the goals
leadership has established.

~~~
dodobirdlord
Most of the google products that have been shut down that HN loves to harp
about were shut down not because they failed to reach some sort of goal, but
because they had no goals at all. They are by and large the work of a few
people and nobody felt like maintaining them. The one exception is Google+,
which notably unlike Google Cloud didn't require spending billions of dollars
on datacenters and undersea cables, or on hiring/diverting thousands and
thousands of engineers. Nor did it require building a third-party partner
ecosystem and signing long term contracts with deprecation windows. Nor did it
have a projected total market revenue larger than all digital advertising.

------
samspenc
My biggest takeaway from this article was that while Google publicly reports
its "cloud" revenue (including GSuite revenue) as $8 billion a year, its cloud
computing revenue (the portion that competes with AWS and Azure) is at $1-2
billion a year.

That would explain why Google would be willing to shut down Google Cloud in
2023 if they are not one of the top 2 players in this space. (Additional
context and previous discussion below.)

[1] The Information: [https://www.theinformation.com/articles/google-brass-
set-202...](https://www.theinformation.com/articles/google-brass-set-2023-as-
deadline-to-beat-amazon-microsoft-in-cloud)

[2] Discussed on Hacker News previously:
[https://news.ycombinator.com/item?id=21815260](https://news.ycombinator.com/item?id=21815260)

~~~
cmdshiftf4
>That would explain why Google would be willing to shut down Google Cloud in
2023 if they are not one of the top 2 players in this space.

I wonder how much of an effect this disclosure will affect the outcome?

I've used AWS heavily for work-related services and have touched GCP a few
times for little side projects in the past. Knowing that they'd be prepared to
shut down GCP if they're not market leader or market second within a small
amount of time ensures I personally will never, _ever_ use them for enterprise
work, and I'm sure I'm not alone in that.

~~~
mlthoughts2018
I’m in the middle of a painful migration from AWS to GCP and my advice is
definitely stay away from GCP.

The cloud tools do not usually have real parity or interop with other cloud
tools as claimed (eg interop with boto or s3), many gcloud utilities have way
worse performance and memory issues, the docs are plastered with up-selling
ads and, inconsistent service account auth vs IAM-style user auth issues, and
on top of all that, there is this risk Google shuts it down.

Even if they don’t shut down GCS or GKE core stuff, there are so many
peripheral products like managed big data solutions, Cloud Functions, etc.,
that seem like _classic_ cases where Google will abruptly shut them down.

~~~
sciurus
For info on how things are shut down, see

[https://cloud.google.com/terms/#deprecation-
policy](https://cloud.google.com/terms/#deprecation-policy)

[https://cloud.google.com/terms/deprecation](https://cloud.google.com/terms/deprecation)

------
smiljo
It's actually a great testament to Microsoft's execution that they were able
to catch up (to some extent at least), despite AWS having a seven year head
start.

Bezos himself called this a business miracle (the seven year head start, that
is):
[https://youtu.be/f3NBQcAqyu4?t=2133](https://youtu.be/f3NBQcAqyu4?t=2133)

And this is against Amazon, which is known for execution. I suppose we're in
for a fun couple of years, especially with the JEDI contract soap opera and
all that.

~~~
nimbius
Id argue Microsofts strong suit here is making themselves _look_ competitive.
During the web server wars Apache reigned supreme, until the numbers shifted
in favour of IIS which overtook Apache for a time. Was this a better product
Apache was fending off? no. Microsoft had paid hosting providers to park web
domains and registrations on IIS servers so Netcraft would finger them as #1.

now we have Azure and its the same thing all over again. Azure Cloud has lots
of tenancy, but these numbers I suspect are bogus. Azure runs Office 365,
Exchange, Bing, and Xbox Live assets as well, and these are all "tenants." MS
also bundles discounts for business critical things like desktop and server
licenses into accepting Azure credits, so its likely many of these tenants are
on paper only.

~~~
jeromebaek
Azure doesn't run O365, Exchange, Bing, or Xbox Live. Please stop spreading
misinformation. (I work at MS.)

~~~
tallanvor
O365 workloads are distributed across a number of environments. While Exchange
mostly lives one its own hardware, SPO is very distributed now - it still has
its own hardware, but also has a lot of data and services that run in Azure.
And O365 is very dependent on AAD.

~~~
jeromebaek
This is all true, but it’s a far cry from OP’s statement

------
psaux
Financial inquire: I would like to see the breakout from MSFT on what is
actual Azure revenue. That would be a good comparison with AWS on the revenue
side. MSFT now includes the O365 entire suite and other SAAS products with
their cloud revenue. Office is huge alone.

Also, genius tactic, MSFT gives you free SQL Server, Windows Server, and
Exchange when you buy Azure credits. I have friends with expiring Azure
credits coming up soon, waiting to see how MSFT handles. MSFT has massive
cash, so prob extend for free or some other magic move.

Edit: For context, these are multi millions dollars in Azure credits, some
20M+, not being used.

------
neonate
[http://archive.md/Gblhd](http://archive.md/Gblhd)

------
trophycase
Just an anecdote, but for my small project I recently switched from AWS to DO
and am saving about 60% or more.

~~~
steve_adams_86
Likewise, we run everything in DO and it's around 30% less so far, but we're
also able to afford managed databases at that rate. To make them redundant
will bring us closer to our AWS rates, but... I'm very happy to have managed
services at the moment, and the value is felt both in productivity and
finances. I'm really happy we moved over.

------
pasttense01
One thing to note is that the cloud is only about 5% of total IT expenditures.
So getting data which has never been on the cloud is more important than
taking data away from competitors.

------
rossdavidh
So, there's a thing I wonder about cloud businesses, Amazon or anyone else's.
How much of this is funded by businesses that are not profitable, but are
running on VC money? I recall the IPO documentation for companies like Uber
stating a stupendous amount of their $$ going for AWS.

I am reminded of Paul Graham's description of Yahoo's advertising business in
1999. Lots of paying customers, things seem great, you're solidly profitable.
But what if most of your customers aren't profitable? What happens when the
next recession comes?

Not saying cloud computing is going away, but I think its current apparent
growth rates are being propped up by a lot of Softbank (and similarly
unprofitable) investments, which will go away fast when the next recession
comes. Until then, we don't really know how profitable cloud computing is as a
business. It may not be as good as it looks right now.

~~~
enitihas
I thought uber ran their own data centres, and Lyft was the one running on
AWS.

------
NickKampe
Have none of you used GCP? It's a fantastic platform and those who your AWS
are blind to the cloud native world.

~~~
bsder
Unless GCP is an _order of magnitude_ better or cheaper (which I have seen no
evidence of), the question becomes "Why take the risk?"

~~~
rossjudson
I suppose if you have an _order of magnitude_ more cash floating around and
nothing better to spend it on, that's true.

Most businesses like to keep as much of their money as they can. They can use
it to pay people and stuff.

~~~
bsder
An "order of magnitude superior" is generally the _minimum_ that causes me to
start expending engineering effort to move from something implemented and
nominally working to something unfamiliar and unimplemented.

10% _savings_ is almost never worth engineering effort. Those engineers are
probably worth more than 10% by implementing features or fixing a bug for a
customer.

However, even if 10% savings is $1 million, the edge odds probably _still_
aren't in your favor. You may burn engineering time and the project fails or
takes 3 times as long. Those engineers are effectively "dead" during that time
and whatever contribution they could have made elsewhere is lost. For some
reason, nobody ever factors that into their "savings projections".

Obviously, if I've reached the point that 10% savings is $10 million, I'm in a
different bucket. But having $100 million in cloud spend probably indicates a
lot more problems than AWS vs GCP.

------
9nGQluzmnq3M
[http://archive.is/Gblhd](http://archive.is/Gblhd)

------
c3534l
Here's the thing though, they actually _don 't_ have to fend off rivals.
Amazon's cloud business is based on excess capacity that they have as one of
the internet's biggest chokepoint in traffic (post-Thanksgiving holiday
spending). When I took managerial accounting classes, we looked at situations
where it would seem on paper that producing a certain good would lose money,
but when you compared total profitability in letting excess capacity sit idle
and distributing fixed costs like rent and overhead, you can actually sell a
good for a loss. Amazon doesn't have to make more money than they spend on
cloud computing, they only have to make more money than what they would have
had to spend on cloud computing without competing on the market.

~~~
cthalupa
>Amazon's cloud business is based on excess capacity that they have as one of
the internet's biggest chokepoint in traffic

This meme needs to die. It is not true and it has never been true that AWS was
built out of excess Amazon infrastructure.

[https://www.networkworld.com/article/2891297/the-myth-
about-...](https://www.networkworld.com/article/2891297/the-myth-about-how-
amazon-s-web-service-started-just-won-t-die.html)

~~~
c3534l
I stand corrected.

