Cloud Service Provider Comparison - Who Will be the Next Big Provider? Part One: Alibaba - ParkMyCloud

Cloud Service Provider Comparison – Who Will be the Next Big Provider? Part One: Alibaba

When making a cloud service provider comparison, you would probably think of the “big three” providers: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Thus far, AWS has led the cloud market, but the other two are gaining market share, driving us to make comparisons between Azure vs AWS and Google vs AWS. But that’s not the whole story.

In recent years, a few other “secondary” cloud providers have made their way into the market, offering more options to choose from. Are they worth looking at, and could one of them become the next big provider?

Andy Jassy, CEO of AWS, says: “There won’t be just one successful player. There won’t be 30 because scale really matters here in regards to cost structure, as well as the breadth of services, but there are going to be multiple successful players, and who those are I think is still to be written. But I would expect several of the older guard players to have businesses here as they have large installed enterprise customer bases and a large sales force and things of that sort.”

So for our next cloud service provider comparison, we are going to do an overview of what could arguably be the next biggest provider in the public cloud market (after all, we need to add a 4th cloud provider to the ParkMyCloud arsenal).:

Alibaba

Alibaba is a cloud provider not widely known about in the U.S., but it’s taking China by storm and giving Amazon a run for its money in Asia. It’s hard to imagine a cloud provider (or e-commerce giant) more successful than what we have seen with Amazon, let alone a provider that isn’t part of the big three, but Alibaba has their sights set on surpassing AWS to dominate the world wide cloud computing market.

Take a look at some recent headlines:

Guess Who’s King of Cloud Revenue Growth? It’s Not Amazon or Microsoft

Alibaba Just Had Its Amazon AWS Moment

Alibaba Declares War on Amazon’s Surging Cloud Computing Business

What we know so far about Alibaba:

  • In 2016: Cloud revenue was $675 million, surpassing Google Cloud’s $500 million. First quarter revenue was $359 million and in the second quarter rose to $447 million.
  • Alibaba was dubbed the highest ranking cloud provider in terms of revenue growth, with sales increasing 126.5 percent from 2015 ($298 million) to 2016
  • Gartner research places Alibaba’s cloud in fourth place among cloud providers, ahead of IBM and Oracle

Alibaba Cloud was introduced to cloud computing just three years after Amazon launched AWS. Since then, Alibaba has grown at a faster pace than Amazon, largely due to their domination of the Chinese market, and is now the 5th largest cloud provider in the world.

Alibaba’s growth is attributed in part to the booming Chinese economy, as the Chinese government continues digitizing, bringing its agencies online and into the cloud. In addition, as the principal e-commerce system in China, Alibaba holds the status as the “Amazon of Asia.” Simon Hu, senior vice president of Alibaba Group and president of Alibaba Cloud, claims that Alibaba will surpass AWS as the top provider by 2019.

Our Take

For the time being, Amazon is still dominating the U.S. cloud market, exceeding $400 billion in comparison to Alibaba’s $250 billion. Still, Alibaba Cloud is growing at incredible speed, with triple digit year-over-year growth over the last several quarters. As the dominant cloud provider in China, Alibaba is positioned to continue growing, and is still in its early stages of growth in the cloud computing market. Only time will reveal what Alibaba Cloud will do, but in the meantime, we’ll definitely be keeping a lookout. After all, we have customers in 20 countries around the world, not just in the U.S.  

Next Up: IBM & Oracle

Apart from the big three cloud providers, Alibaba is clearly making a name for itself with a fourth place ranking in the world of cloud computing. While this cloud provider is clearly gaining traction, a few more have made their introduction in recent years. Here’s a snapshot of the next 2 providers in our cloud service provider comparison:

IBM

  • At the end of June 2017, IBM made waves when it outperformed Amazon in total cloud computing revenue at $15.1 billion to $14.5 billion over a year-long period
  • However, Amazon is still way ahead when it comes to the IaaS market
    • For 2016, Amazon had the highest IaaS revenue, followed by Microsoft, Alibaba, and Google, respectively. IBM did not make the top 5.
    • Alibaba had the highest IaaS growth rate, followed by Google, Microsoft, and Amazon, respectively.
  • IBM was the fourth biggest cloud provider – before Alibaba took over
  • In Q1 of 2017, Synergy rankings showed that IBM has 4 percent of the public cloud market share, just behind Alibaba’s 5 percent
    • AWS had 44 percent, Azure – 11 percent, and Google Cloud – 6 percent

Oracle

  • Oracle’s cloud business is still ramping up, particularly in terms of IaaS
  • In fiscal Q1 of 2018, growth was at 51 percent, down from a 60 percent average in the last four quarters
    • Q4 for fiscal 2017 was at 58 percent
  • Since last quarter, shares have gone down by 10 percent

When making a cloud service provider comparison, don’t limit yourself to the “big three” of AWS, Azure, and GCP. They might dominate the market now, but as other providers grow, innovate, and increase their following in the cloud wars – we’ll continue to track and compare as earnings are reported.


About Jay Chapel

Jay Chapel is the CEO and co-founder of ParkMyCloud. After spending several years in the cloud management space, Jay saw that there was no simple solution to the problem of wasted cloud spend – which led him to start ParkMyCloud in 2015. Before that, he spent 10+ years with Micromuse and IBM Tivoli, a provider of business infrastructure management software. After an acquisition by IBM, he led the successful sales integration and subsequent growth of the IBM Tivoli/Netcool business in Europe. He also held several regional and worldwide sales roles in Switzerland, the UK and the US. Jay earned both a BA in Finance and an MBA from West Virginia. Those few hours a month that Jay’s not busy with ParkMyCloud’s growth and success, you can find him on the ski slopes, on the soccer field, or on the golf course often accompanied by his three kids.

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