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The Surprising Reason Behind Azure’s Mega Momentum

Posted by Ellen Rubin on 5/9/17 11:00 AM

Azure is gaining momentumWhen a recent UBM Research survey found more enterprise IT shops pointing to Azure as their public cloud provider of choice over Amazon Web Services, we took note. These findings echo what we’ve been hearing from customers over the past year. No doubt, AWS still has commanding presence in the market, but Azure is gaining momentum, particularly in the enterprise space, where the business imperative to go to the cloud is growing.

An interesting evolution has taken place over the past eight years or so since AWS began wooing businesses to the public cloud. During that time, enterprises have been trying to figure out how to get there from here: choosing apps to move, building new ones, managing security controls and extending on-prem footprints to the cloud. Simultaneously, IT leadership teams have been asking how they can help their businesses by embracing the cloud – without locking themselves to an unfamiliar vendor. More of them are ready to answer those questions now, and Azure has a lot to do with that.

Part of the reason for this shift is that enterprises were never comfortable with Amazon as their only public cloud option. They wanted alternatives, but none were as mature as Amazon. But over the past year and a half, Microsoft has really caught up, and that is particularly compelling for larger enterprises. These are the companies that have had relationships with Microsoft for many years, and, perhaps surprisingly, that one fact makes a huge difference. Enterprise development teams have used Windows as their primary environments, and their business leaders have invested in Microsoft offerings throughout their careers. CIOs, VPs of infrastructure and other IT leaders are quite comfortable with their Microsoft relationships. And now that Azure can hold its own in a side-by-side comparison with AWS, those business advantages are tipping the scales toward Microsoft.

Competition among public cloud providers continues in enterprise market

It’s easy to forget given the continued growth of this market, but cloud adoption is still small. In its “2017 State of the Cloud Report,” RightScale notes that “among enterprises, respondents run 32 percent of workloads in public cloud.” The report found that 68 percent of the enterprises included fell into the cloud “watchers,” “beginners or “explorers” stages, meaning they were planning projects, had begun first projects or had some apps running in the cloud. Only 28 percent reported heavy cloud use.

With only a fraction of companies that could be in the cloud reporting heavy usage, there’s still plenty of time for competitive rivalries to play out among AWS, Azure and other players (like Google, which is trying to build its credibility among enterprises, but hasn’t yet succeeded). There is opportunity for other public cloud providers to join this race, but they’ll have to specialize, execute and recognize the multi-cloud future to be competitive.

At the moment, Microsoft’s Azure is easier for enterprises to do business with; the company is more likely to engage in enterprise procurement and legal discussions than Amazon. Microsoft has also rolled out an on-premises option with Azure Stack that directly addresses the popular hybrid model, unlike Amazon, which continues to focus on everything moving to AWS. However, the future is not one in which companies must decide which cloud is the right one. Rather, they should focus on which cloud is the right one for each application.

Ready for the cloud? Make sure your network is prepared.

Topics: Bringing the Cloud to Primary Data , Founder's Perspective

About the Author

Ellen Rubin

Ellen Rubin is an experienced entrepreneur with a proven track record in leading strategy, market positioning and go-to-market for fast-growing companies. Most recently she was co-founder of CloudSwitch, a cloud enablement software company that was successfully acquired by Verizon in 2011. At Verizon, Ellen ran the cloud products group and was responsible for the strategy and roadmap for all cloud offerings.

Prior to founding CloudSwitch, Ellen was Vice President of Marketing at Netezza (NYSE: NZ), the pioneer and global leader in data warehouse appliances that power business intelligence and analytics at over 200 enterprises worldwide. As a member of the early management team at Netezza, Ellen helped grow the company to $130 million in revenues and a successful IPO in 2007. Ellen defined and created broad market acceptance of a new category, “data warehouse appliances,” and led market strategy, product marketing, complementary technology relationships and marketing communications.

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