Posts Tagged With: Google Apps

Quantifying Cloud Computing Market Share

Recent years have witnessed a proliferation of analyses about the size and relative market share of vendors in the cloud computing space. According to a post in GigaOM, UBS Analysts estimate that “the total market for AWS-type services will be between $5-to-$6 billion in 2010 and will eventually grow to $15-to-$20 billion in 2014.” Gartner, meanwhile, estimates that the IaaS market will grow from $3.7 billion in 2010 to $10.5 billion in 2014. Forrester predicts that IaaS spending alone will increase from $2.9B, projected to grow to $5.85B by 2015 in their recent report, Sizing the Cloud, Understanding and Quantifying the Future of Cloud Computing.

The discrepancies between these estimates of the current and future state of the IaaS space illustrate some of the difficulties specific to quantifying cloud computing market share, many of which of derive from the following reasons:

• The plurality of cloud computing modalities renders calculations of market share complex. While it’s true that the terms IaaS, PaaS and SaaS remain powerful terms for understanding cloud computing deployments, vendors are increasingly offering more than one variation of the IaaS, PaaS and SaaS trinity. Amazon’s Elastic Beanstalk, for example, constitutes a PaaS offering from the largest IaaS vendor in the space. Meanwhile, Red Hat offers an IaaS product called CloudForms alongside a PaaS offering known as OpenShift. Moreover, analysts may choose to include or not include SaaS, PaaS or consulting services from cloud computing products in their estimation of cloud computing revenue.

• Vendors often refuse to disclose cloud computing revenues, especially if they are privately held or otherwise multi-tiered businesses wherein cloud revenue is miniscule in comparison to revenues from other services. Amazon Web Services constitutes the paradigmatic example, here, but the recent acquisitions of Terremark by Verizon and Savvis by CenturyLink may serve as further cases in point, though most reports suggest that both Terremark and Savvis will function as independent business units within their parent company with detailed revenue breakdowns.

• Within the first half of 2011, Dell, HP, IBM, Oracle, Red Hat, Apple, Go Daddy and Microsoft have made increased commitments to cloud computing deployments in ways that promise to significantly impact the existing market share balance.

• The global nature of cloud computing renders quantification of market share challenging because many U.S. cloud computing vendors operate transnationally in partnership with other channel partners that may or may not report revenue in a transparent fashion. Consider Joyent’s partnership with ClusterTech and Qihoo 360 Technologies in China, for example, in this regard.

Despite these methodological difficulties, we can make some definitive statements about vendor revenue. Consider the following revenue data points, for 2010:

1. IaaS
a. Amazon Web Services: $500–700 million
b. Rackspace: $100 million
c. Terremark: $37.5 million, prior to acquisition by Verizon
d. Savvis: $15.2 million, prior to acquisition by CenturyLink
e. Joyent: $10- 20 million

2. SaaS
a. Salesforce.com: $1.3 billion
b. NetSuite: $200 million
c. Rightnow: $200 million
d. SuccessFactors: $200 million
e. Taleo: $200 million

Revenue for PaaS in 2010 is difficult to locate and widely believed to be miniscule. But given the sheer number and heterogeneity of cloud computing vendors and deployments, these numbers represent little consolation for analysts and investors seeking to understand trends in the cloud computing universe. How will Apple’s iCloud fit into this equation, for example? What about Facebook and Google? In what way will Microsoft’s Office 365 change market share in the productivity software space? Part of the difficulty of estimating cloud market share, here, involves the lack of a common set of standards for measuring the size of cloud computing deployments, in addition to the challenges specific to locating data for annualized cloud based revenue per vendor. Until inter-operability standards emerge, analysts will need to develop new methods of imposing discipline and rigor on the conglomeration of cloud computing forms. Meanwhile, vendors and customers alike should push for inter-operability standards that facilitate apples to apples comparisons of cloud offerings from vendors across the globe.

Categories: Cloud Computing Market Share | Tags: , , , , , , , , , , | 7 Comments

Microsoft Releases Office 365 to Stake Claim to Cloud Productivity Software Space

Microsoft Corporation consolidated its position in the productivity software market on Tuesday with the market release of Office 365, the online version of its Microsoft Office suite of software applications such as Microsoft Word, Excel, PowerPoint and OneNote. In releasing the market version of a Beta product circulated in the fall of 2010, Microsoft goes head to head with Google Apps in the competition for enterprise market share from businesses seeking productivity and collaboration tools. Although Office 365 has the potential to cannibalize sales of the popular desktop Microsoft Office suite, Microsoft predicts net revenue from its productivity software will increase as a result of business subscriptions from small to medium sized businesses. Speaking of the product’s target market, Microsoft CEO Stave Ballmer noted: “Office 365 levels the playing field, giving small and midsize businesses powerful collaboration tools that have given big businesses an edge for years.”

In a manner similar to Google Apps for Business, Office 365 allows multiple users to simultaneously edit the same documents and access them from web enabled devices including smartphones. Office 365 is priced anywhere from $2/month per user for email services to $24/month per user for the most powerful versions of the Office productivity suite and Exchange, SharePoint and Lync Online. Office 365 for Small Businesses, intended for a maximum of 50 users with “minimal IT resources,” is aggressively priced at $6/month in comparison to Google Apps, at $5/month per user. Microsoft’s entrance into the cloud based productivity software space was not lost on Google. Shan Sinha, Google Apps Product Manager, noted in a Google blog post that Office 365 was designed for individuals whereas Google Apps was conceived for teams; that Office 365 is optimized for Windows PCs whereas Google Apps works well on virtually any web enabled platform; and Google Apps is optimized for cloud based deployment whereas Office 365 represents “legacy, desktop software,” that has been transferred to a data center and labeled “cloud.” “Apps,” Sinha notes, “was born for the web and we’ve been serving hundreds of millions of users for years.”

Analysts are divided as to who holds the advantage between Google and Microsoft in the productivity software space. On one hand, Google holds a competitive edge both in terms of first mover advantage and the free version of its productivity suite, Google Docs. Microsoft, nevertheless, dominates the productivity software space with 90% of the market and a customer base that is familiar with and loyal to its software. That said, questions remain as to whether Microsoft can ameliorate the problems that caused outages of the precursor to Office 365, the Business Productivity Online Suite (BPOS). Google clearly has more experience and skill with large scale cloud deployments although it remains to be seen how convincingly its productivity suite can gain traction in the enterprise space.

Categories: Microsoft | Tags: , , , , , , , , | 1 Comment

Create a free website or blog at WordPress.com. The Adventure Journal Theme.