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5 reasons why Google can catch Amazon in the cloud

Sharon Gaudin | April 30, 2014
Amazon dominates the cloud but analysts say don't count out Google.

Amazon has such a huge share of the global cloud market it would appear none of its competitors, including Internet behemoth Google, could ever catch up.

That may not be the case.

Google, according to industry analysts, is positioning itself to take on Amazon's dominance. Despite how far back it's lagging today, Google could catch Amazon and some day supplant its top position in the cloud.

"Amazon essentially has more than 80% to 85% of cloud market share in terms of providing platform as a service," said Jagdish Rebello, a research director with IHS iSuppli. "The market is in its infancy, and Amazon sort of created the market so it's got an early lead. It's not a player to be sneezed at. But somebody like a Google could catch up with them."

Amazon's cloud computing platform, Amazon Web Services (AWS), launched in 2006 and immediately drove hard into a market it was basically creating on the fly.

Aside from holding as much as 85% of the market today, AWS has more than five times the compute capacity in use than its next 14 competitors combined, according to a 2013 Gartner report.

Business isn't slowing for AWS either.

Amazon reported last week that in the first quarter ending March 31, sales for Amazon's "other" category, which includes AWS, grew by about 60% year-over-year. That put sales around $1.2 billion for the quarter, compared to $750 million for the same period in 2013.

The company, which originally made its name as an online bookseller, also has a rich ecosystem that competitors like Google can't touch at this point.

"Where Amazon steps ahead is in its ecosystem," said Lauren Nelson, an analyst with Forrester Research. "It has the largest ecosystem out there. You can use their long list of offerings and it's ready to deploy super quickly and it's very automated and scalable. There are thousands of companies that all the work they do is on top of AWS. Some do security. Some handle compliance issues. There are a lot there."

Can Amazon hold that position in the long term, especially in the face of increasing competition? Google is considered to be in the forefront of that challenge, but it's not alone. After essentially having the public cloud market to itself for years, Amazon is watching warily as companies like Microsoft, IBM, Hewlett-Packard and Verizon make their own push.

There's even talk that Facebook is positioning itself to join the fray and build its own public cloud service.

With those challenges ahead, Amazon's continued growth and dominance may come a lot harder.

Google, meanwhile, has the best chance of succeeding in its advances on Amazon. According to analysts, Google, the company that dominates online search, stormed the mobile world with Android and eclipsed free email offerings with Gmail, is primed to take on Amazon. Neither Google nor Amazon would offer comment for this story, but here are five reasons that Google can catch up to Amazon.

 

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