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

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.

Complex Cloud Pricing Models Mean You Need Automated Cost Control

Cloud pricing models can be complex. In fact, it’s often difficult for public cloud users to decipher a) what they’re spending, b) whether they need to be spending that much, and c) how to save on their cloud costs. The good news is that this doesn’t need to be an ongoing battle. Once you get a handle on what you’re spending, you can automate the cost control process to ensure that you only spend what you need to.

By the way, I recently talked about this on The Cloudcast podcast – if you prefer to listen, check out the episode.

All Cloud Pricing Models Require Cost Management

automate cloud cost savingsThe major cloud service providers – Amazon Web Services, Microsoft Azure, and Google Cloud Platform – offer several pricing models for compute services – by usage, Reserved, and Spot pricing.

The basic model is by usage – typically this has been per-hour, although AWS and Google both recently announced per-second billing (more on this next week.) This requires careful cost management, so users can determine whether they’re paying for resources that are running when they’re not actually needed. This could be paying for non-production instances on nights and weekends when no one is using them, or paying for oversized instances that are not optimally utilized.

Then there are Reserved Instances, which allow you to pre-pay partially or entirely. The billing calculation is done on the back end, so it still requires management effort to ensure that the instances you are running are actually eligible for the Reserved Instances you’ve paid for.

As to whether these are actually a good choice for you, see the following blog post: Are AWS Reserved Instances Better Than On-Demand? It’s about AWS Reserved Instances, although similar principles apply to Azure Reserved Instances.

Spot instances allow you to bid on and use spare compute capacity for a cheap price, but their inherent risk means that you have to build fault-tolerant applications in order to take advantage of this cost-saving option.

However You’re Paying, You Need to Automate

The bottom line is that while visibility into the costs incurred by your cloud pricing model is an important first step, in order to actually reduce and optimize your cloud spend, you need to be able to take automated actions to reduce infrastructure costs.

To this end, our customers told us that they would like the ability to park instances based on utilization data. So, we’re currently developing this capability, which will be released in early December. Following that, we will add the ability for ParkMyCloud to give you right sizing recommendations – so not only will you be able to automatically park your idle instances, you’ll also be able to automatically size instances to correctly fit your workloads so you’re not overpaying.

Though cloud pricing can be complicated, with governance and automated savings measures in place, you can put cost worries to the back of your mind and focus on your primary objectives.

3 Things Companies Using Cloud Computing Should Make Sure Their Employees Do

These days, there’s a huge range of companies using cloud computing, especially public cloud. While your infrastructure size and range of services used may vary, there are a few things every organization should keep in mind. Here are the top 3 we recommend for anyone in your organization who touches your cloud infrastructure.

Keep it Secure

OK, so this one is obvious, but it bears repeating every time. Keep your cloud access secure.

For one, make sure your cloud provider keys don’t end up on GitHub… it’s happened too many times.

(there are a few open source tools out there that can help search your GitHub for this very problem, check out AWSLabs’s git-secrets).

Organizations should also enforce user governance and use Role-Based Access Control (RBAC) to ensure that only the people who need access to specific resources can access them.

Keep Costs in Check

There’s an inherent problem created when you make computing a pay-as-you-go utility, as public cloud has done: it’s easy to waste money.

First of all, the default for computing resources is that they’re “always on” unless you specifically turn them off. That means you’re always paying for it.

Additionally, over-provisioning is prevalent – 55% of all public cloud resources are not correctly sized for their resources. The last is perhaps the most brutal: 15% of spend is on resources which are no longer used. It’s like discovering that you’re still paying for that gym membership you signed up for last year, despite the fact that you haven’t set foot inside. Completely wasted money.

In order to keep costs in check, companies using cloud computing need to ensure they have cost controls in place to eliminate and prevent cloud waste – which, by the way, is the problem we set out to solve when we created ParkMyCloud.

Keep Learning

Third, companies should ensure that their IT and development teams continue their professional development on cloud computing topics, whether by taking training courses or attending local Meetup groups to network with and learn from peers. We have a soft spot in our hearts for our local AWS DC Meetup, which we help organize, but there are great meetups in cities across the world on AWS, Azure, Google Cloud, and more.

Best yet, go to the source itself. Microsoft Azure has a huge events calendar, though AWS re:Invent is probably the biggest. It’s an enormous gathering for learning, training, and announcements of new products and services (and it’s pretty fun, too).

We’re a sponsor of AWS re:Invent 2017 – let us know if you’re going and would like to book time for a conversation or demo of ParkMyCloud while you’re there, or just stop by booth #1402!

3 Enterprise Cloud Management Challenges You Should Be Thinking About

3 Enterprise Cloud Management Challenges You Should Be Thinking About

Enterprise cloud management is a top priority. As the shift towards multi-cloud environments continues, so has the need to consider the potential challenges. Whether you already use the public cloud, or are considering making the switch, you probably want to know what the risks are. Here are three you should be thinking about.

1. Multi-Cloud Environments

As the ParkMyCloud platform supports AWS, Azure, and Google, we’ve noticed that multi-cloud strategies are becoming increasingly common among enterprises. There are a number of reasons why it would be beneficial to utilize more than one cloud provider. We have discussed risk mitigation as a common reason, along with price protection and workload optimization. As multi-cloud strategies become more popular, the advantages are clear. However, every strategy comes with its challenges, and it’s important for CIOs to be aware of the associated risks.

Without the use of cloud management tools, multi-cloud management is complex and sometimes difficult to navigate. Different cloud providers have different price models, product features, APIs, and terminology. Compliance requirements are also a factor that must be considered when dealing with multiple providers. Meeting and maintaining requirements for one cloud provider is complicated enough, let alone multiple. And don’t forget you need a single pane to view your multi-cloud infrastructure.

2. Cost Control

Cost control is a first priority among cloud computing trends. Enterprise Management Associates (EMA) conducted a research study and identified key reasons why there is a need for cloud cost control, among them were inefficient use of cloud resources, unpredictable billing, and contractual obligation or technological dependency.

Managing your cloud environment and controlling costs requires a great deal of time and strategy, taking away from the initiatives your enterprise really needs to be focusing on. The good news is that we offer a solution to cost control that will save 65% or more on your monthly cloud bills – just by simply parking your idle cloud resources. ParkMyCloud was one of the top three vendors recommended by EMA as a Rapid ROI Utility. If you’re interested in seeing why, we offer a 14-day free trial.

3. Security & Governance

In discussing a multi-cloud strategy and its challenges, the bigger picture also includes security and governance. As we have mentioned, a multi-cloud environment is complex, complicated, and requires native or 3rd party tools to maintain vigilance. Aside from legal compliance based on the industry your company is in, the cloud also comes with standard security issues and of course the possibility of cloud breaches. In this vein, as we talk to customers they often worry about too many users being granted console access to create and terminate cloud resources which can lead to waste. A key here is limiting user access based on roles or Role-based Access Controls (RBAC). At ParkMyCloud we recognize that visibility and control is important in today’s complex cloud world. That’s why in designing our platform, we provide the sysadmin the ability to delegate access based on a user’s role and the ability to authenticate leveraging SSO using SAML integration . This approach brings security benefits without losing the appeal of a multi-cloud strategy.

Our Solution

Enterprise cloud management is an inevitable priority as the shift towards a multi-cloud environment continues. Multiple cloud services add complexity to the challenges of IT and cloud management. Cost control is time consuming and needs to be automated and monitored constantly. Security and governance is a must and it’s necessary to ensure that users and resources are optimally governed. As the need for cloud management continues to grow, cloud automation tools like ParkMyCloud provide a means to effectively manage cloud resources, minimize challenges, and save you money.

Cloud Optimization Tools = Cloud Cost Control (Part II)

Cloud Optimization Tools = Cloud Cost Control (Part II)

A couple of weeks ago in Part 1 of this blog topic we discussed the need for cloud optimization tools to help enterprises with the problem of cloud cost control. Amazon Web Services (AWS) even goes as far as suggesting the following simple steps to control their costs (which can also be applied  to Microsoft Azure and Google Cloud Platform, but of course with slightly different terminology):

    1. Right-size your services to meet capacity needs at the lowest cost;
    2. Save money when you reserve;
    3. Use the spot market;
    4. Monitor and track service usage;
    5. Use Cost Explorer to optimize savings; and
    6. Turn off idle instances (we added this one).

A variety of third-party tools and services have popped up in the market over the past few years to help with cloud cost optimization – why? Because upwards of $23B was spent on public cloud infrastructure in 2016, and spending continues to grow at a rate of 40% per year. Furthermore, depending on who you talk to, roughly 25% of public cloud spend is wasted or not optimized — that’s a huge market! If left unchecked, this waste problem is supposed to triple to over $20B by 2020 – enter the vultures (full disclosure, we are also a vulture, but the nice kind). Most of these tools are lumped under the Cloud Management category, which includes subcategories like Cost Visibility and Governance, Cost Optimization, and Cost Control vendors – we are a cost control vendor to be sure.

Why do you, an enterprise, care? Because there are very unique and subtle differences between the tools that fit into these categories, so your use case should dictate where you go for what – and that’s what I am trying to help you with. So, why am I a credible source to write about this (and not just because ParkMyCloud is the best thing since sliced bread)?

Well, yesterday we had a demo with a FinTech company in California that was interested in Cost Control, or thought they were. It turns out that what they were actually interested in was Cost Visibility and Reporting; the folks we talked to were in Engineering Finance, so their concerns were primarily with billing metrics, business unit chargeback for cloud usage, RI management, and dials and widgets to view all stuff AWS and GCP billing related. Instead of trying to force a square peg into a round hole, we passed them on to a company in this space who’s better suited to solve their immediate needs. In response, the Finance folks are going to put us in touch with the FinTech Cloud Ops folks who care about automating their cloud cost control as part of their DevOps processes.

This type of situation happens more often than not. We have a lot of enterprise customers using ParkMyCloud along with CloudHealth, CloudChekr, Cloudability, and Cloudyn because in general, they provide Cost Visibility and Governance, and we provide actionable, automated Cost Control.

As this is our blog, and my view from the street – we have 200+ customers now using ParkMyCloud, and we demo to 5-10 enterprises per week. Based on a couple of generic customer uses cases where we have strong familiarity, here’s what you need to know to stay ahead of the game:

  • Cost Visibility and Governance: CloudHealth, CloudChekr, Cloudability and Cloudyn (now owned by Microsoft)
  • Reserved Instance (RI) management – all of the above
  • Spot Instance management – SpotInst
  • Monitor and Track Usage: CloudHealth, CloudChekr, Cloudability and Cloudyn
  • Turn off (park) Idle Resources – ParkMyCloud, Skeddly, Gorilla Stack, BotMetric
  • Automate Cost Control as part of your DevOps Process: ParkMyCloud
  • Govern User Access to Cloud Console for Start/Stop: ParkMyCloud
  • Integrate with Single Sign-On (SSO) for Federated User Access: ParkMyCloud

To summarize, cloud cost control is important, and there are many cloud optimization tools available to assist with visibility, governance, management, and control of your single or multi-cloud environments. However, there are very few tools which allow you to set up automated actions leveraging your existing enterprise tools like Ping, Okta, Atlassian, Jenkins, and Slack.  Make sure you are not only focusing on cost visibility and recommendations, but also on action-oriented platforms to really get the best bang for your buck.