A new Morgan Stanley CIO survey could have Amazon Web Services quaking in its cloudy boots. According to the survey of 100 IT executives, 31 percent of CIOs will be using Microsoft Azure by 2019, and 30 percent will opt for AWS.
The only problem with this survey: It's asking the wrong people. In today's world, developers determine the cloud an enterprise will use. The CIO? She's not exactly irrelevant, but she's not the one steering the ship for application development.
The CIO is the last to know
As reported by Geekwire, the latest Morgan Stanley CIO Survey shows CIOs are sticking with their old friend Microsoft:
In other words, though AWS is clearly winning the enterprise today (21 percent use AWS today compared to only 12 percent on Azure), Microsoft Azure is expected to nudge out AWS by 2019 -- when CIOs will select Microsoft Azure 31 percent of the time and AWS 30 percent of the time. Everyone else is a rounding error.
This would be more credible except for the two stats. First, AWS generates more than double Microsoft Azure's revenue today. In fact, AWS generated more revenue last quarter ($2.56 billion) than Microsoft Azure did all of last year ($1.1 billion by Morgan Stanley estimates). For the year, AWS has pulled in nearly eight times what Microsoft Azure sells. The CIO math simply doesn't add up.
Second, the percentage of CIO cloud deniers doesn't add up, either. Roughly 55 percent of CIOs declare themselves public cloud-free today. Either these CIOs are lying or are completely clueless, because virtually every enterprise runs applications in the public cloud. These are good people, however, so let's go with clueless.
Developers run the cloud show
Not that we can really hold it against them. After all, the primary decision-making authority in the enterprise has been shifting for years to lines of business and the developers who serve them. A few months back 451 Research analyst Donnie Berkholz noted that half the respondents to its last survey (with 864 respondents) declared the CIO's IT org has no control over line-of-business spend.
Those CIOs keep investing in private cloud or "hybrid" cloud as they struggle to retain control of IT spending, but it's too late. Public cloud growth is dramatically faster than private cloud growth (20X vs. 3X, as measured by VM growth in both, as Gartner has detailed). This corresponds to an accelerating pace of innovation that can't wait on the CIO to finish her game of golf with Mega Vendor X's sales rep.
Developers are driven by convenience, not golf games, and that convenience is pumping massive sums of money into the public cloud. Most of that money currently goes to AWS, whatever CIOs' personal preferences might be.
As such, it's nice to hear about their enthusiasm for Microsoft Azure, which will continue to make Microsoft's cloud play a strong second to AWS. But let's not delude ourselves as to how much control CIOs actually have over the direction of cloud spending.