In search of a neutral top-tier cloud service

The last time Gartner published their IaaS/PaaS provider rankings Amazon AWS and Microsoft Azure occupied the coveted upper right quadrant. To make it into Gartner’s magic quadrant both Amazon and Microsoft needed to demonstrate the quality of their services as well as completeness of their vision.

According to Amazon’s company profile on Reuters, they participate in a number of business segments. Amazon operates and markets an Android App Store, streaming video and music, mobile advertising, retail analytics, movie production, mobile devices (i.e. Kindle tablets), audiobooks and book publishing.

There is no denying that Amazon’s retail business is a formidable force that is driving traditional retailers to rethink their very existence. They have a fleet of vehicles now and offer same day delivery of groceries and consumer goods in major population centers.

Microsoft publishes a list of market segments they are involved in as well. Nobody questions Microsoft’s dominance in operating systems and server products.

Microsoft offers professional IT services that revolve around their software products. Microsoft is also involved in search and online advertising (Bing), gaming (Xbox) and mobile and personal computing (tablets, laptops and phones). And with their bid on LinkedIn this week, Microsoft is clearly trying to get into the social networking business.

An argument can be made that retail customers may hesitate to use AWS for fear that it might fund innovations in Amazon’s retail business. A similar argument can be made that a movie production company that uses AWS Elastic Transcoder is indirectly funding Amazon Studios. Likewise, an online storage company that uses AWS could be somehow funding Amazon Drive.

Similar argument can be made that a game console manufacturer that also makes PCs (yes, I am thinking of Sony) should stay away from Windows 10 and Azure for the risk of helping Microsoft fund the Xbox business. One could also say that an enterprise software company should not cooperate with making their software work on Azure because Microsoft may funnel money into their own software businesses (which Microsoft does, since Azure runs on Windows servers).

And if LinkedIn does end up getting acquired by Microsoft, why would anyone want to host an innovative new professional networking service on Azure for fear of Microsoft funneling Azure revenue to LinkedIn?

Amazon’s streaming movie business has not deterred Netflix from choosing AWS as their cloud provider. Until recently Dropbox was using AWS for most of their storage needs, and they switched to proprietary solution for reasons other than Amazon Drive.’s partnership with AWS has not deterred ALDO from using Salesforce for retail either.

Sony continues to sell amazing laptops running Windows 10 despite the fact that Azure is Xbox’s secret weapon against PS4. SAP continues to certify their products for Azure even though Microsoft offers SQL Server and Dynamics. Microsoft’s historical antagonism towards and lawsuits against Linux and open-source have not stopped Canonical from partnering with Microsoft.

Both Amazon and Microsoft are visionary companies that have the foresight to be at the forefront of the public cloud revolution. Their cloud computing services offer a balance of vision, scale and innovation that nobody else does. Neither company is truly neutral and both companies may have potential conflicts of interests.

Customers and partners who avoid them for theoretical competitive reasons may end up falling behind as they won’t benefit from the innovations AWS and Azure offer.


Copyright © 2016 IDG Communications, Inc.