Beyond AWS: The cloud's next stage

AWS continues to knock it out of the park, but enterprises need more than one cloud after the basics are set

Beyond AWS: The cloud's next stage
Thinkstock's cloud platform, Amazon Web Services, generated $2.56 billion in revenue last quarter, putting it on pace to make $10 billion this year. AWS has been the clear public cloud leader for some time, and the latest financial data shows that leadership translates to real money as more enterprises adopt public cloud computing.

Let's do the math:

  • It's believed that 5 percent of IT workloads are on public clouds now, counting both infrastructure and applications.
  • AWS is estimated to have 70 to 80 percent of the public cloud market.
  • About 40 to 50 percent of workloads can't move to the public cloud.

If AWS continues to grow as it has over the last few years, it will earn $35 to $40 billion by 2018, and $75 to $100 billion by 2019.

AWS successfully transitioned into the enterprise from its original focus by adding features and functions coveted by small businesses and Global 2000 enterprises alike. AWS has a huge head start on other public cloud providers, such as Google and Microsoft, who now regret sitting on the sidelines for as long as they did. Last but not least, AWS is perceived as the de facto leader by pretty much everyone.

What should cloud providers who are not AWS do to entice enterprise IT adoption? They need to think about how to be different and how to innovate. Enterprises will seek out public cloud services that do what AWS can't or won't.

This could mean new approaches to security, monitoring, and governance. Or it could mean vertical services, such as those that focus on health care or finance ... or specialty IT services like dev-test.

Copying AWS at a lower price won't work -- enterprises like discounts, but they value provider stability more, which means they tend to stick with dominant providers.

AWS can't or won't provide everything enterprises need, so the opportunity arises for other public cloud providers to fill those holes. That's great for enterprises. After all, most enterprises will use more than one public cloud, at least as a backup in case of outages or price gouging -- moreso if those other providers offer unique capabilities they need or want. Cloud providers who offer that extra specialization are the ones that enterprises will seek in addition to using AWS.

The cloud market is at the maturity level where both enterprises and cloud providers need to think differently. The basics are known -- and available from a handful of dominant providers (AWS, Microsoft, and Google). The next stage awaits, for both providers and enterprises.

Copyright © 2016 IDG Communications, Inc.