Microsoft and IBM are gaining momentum in the cloud infrastructure services market, putting pressure on Amazon and outpacing rival Google, according to a new study.
Newly released data in the second quarter shows that Amazon's cloud infrastructure services revenue grew 49% compared to the same period in 2013, but IBM showed 86% growth and Microsoft garnered 164%. Google's year-over-year growth came in at 47%.
The analysts noted that the quarterly cloud infrastructure service market reached $3.7 billion in the second quarter. The total market grew more than 45% year-over-year.
Synergy defines cloud infrastructure revenue as everything from infrastructure-as-a-services (IaaS), platform as a service (PaaS), and private and hybrid cloud services.
"Both Microsoft and IBM are giving cloud a lot of focus and it's not just talk. They are backing it up with a lot of investment," John Dinsdale, a chief analyst with Synergy, told Computerworld. "This is in stark contrast to Google, which has its cloud offerings out there, but you don't get the sense that this is one of Google's top priorities. And cloud was not mentioned once in Google's earnings call."
Amazon's cloud revenues are now well over $1 billion per quarter, primarily from cloud infrastructure services, the analysts reported. IBM and Microsoft also both claim quarterly cloud revenues of about $1 billion. However, for IBM and Microsoft, much of their cloud revenue comes from software as a service, cloud-related hardware products and associated professional and technical services.
"It has become clear that Amazon finally has some tough competition to face," Dinsdale said. "While [Amazon] remains a formidable leader of the market, Microsoft is making some huge strides in IaaS and PaaS, while IBM now has clear leadership in the private and hybrid infrastructure services segment."
Another issue that Google faces in the cloud market is that it does not have a long history of working with enterprises. That makes IT and business executives more wary about choosing Google's cloud offerings.
"IBM and Microsoft do and they can leverage that," Dinsdale said. "Amazon didn't but it is benefiting from being the first to market and staying in front of the pack. It has built the scale and now has credibility with enterprise customers."
Brad Shimmin, an analyst with Current Analysis, noted that Google hasn't put as much effort into the cloud as some of its competitors, but it might be set up to gain momentum in the coming quarters.
"Interestingly, Google has been comparatively quiet in building out its cloud platform, Google App Engine in particular," Shimmin said. "However, with the company's recent efforts to make Google Apps for Business, and the Android and Chrome operating systems truly enterprise capable, I expect we will see greater use of that platform as a means of driving the Google partner ecosystem forward toward better enterprise capabilities and greater specificity of the software itself."
All of this movement in the cloud industry means more choice for enterprises looking to move their data and operations to the cloud.
"Already, we're seeing some cooperation with unlikely partners such as SAP and Microsoft," said Shimmin. "Other players, such as Salesforce.com and Google, are also absolutely building their cloud platforms with an eye toward openness, meaning an application built to run on Amazon's platform can, with minimal effort, run on Salesforce.com or some other platform. That of course frees enterprise IT from vendor lock-in at the infrastructure level."
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed . Her email address is firstname.lastname@example.org.