Here's Why Microsoft Thinks It Has The Upper Hand On Amazon Web Services And Google In The Cloud

Microsoft believes that its decades of experience selling software to enterprise customers will give it the upper hand over Amazon Web Services and Google in the battle for enterprise cloud customers.

’Google and Amazon weren't talking to enterprise customers a few years back in deep ways. ... And I think that’s an opportunity for us,’ Julia White, general manager of cloud platform marketing at Microsoft, told CRN in an interview earlier this month.

In a public cloud market where AWS, Microsoft and Google have been slugging it out with compute and storage price cuts, competition for enterprise customers is heating up. As CRN first reported earlier this week, for the Google Cloud Platform. Apple is also an AWS customer but has significantly reduced its reliance on the public cloud giant, according to CRN's sources.

Microsoft’s cloud pitch hinges on hybrid cloud -- or the ability to mix on-premises and public cloud infrastructure -- and means that enterprises don’t have to move all of their computing to the cloud at once.

The Redmond, Wash., software giant , which lets Microsoft customers run private clouds that are compatible with the Azure public cloud.

White said Azure Stack, currently in preview, is attracting lots of interest from enterprise customers. ’Demand for this is off the charts,’ she said. ’This shows people are really interested in the cloud, but really want to have a controlled way to get there.’

White said hybrid cloud is now very much in vogue in the technology industry, as evidenced by the large number of vendors slapping the hybrid label on products that don’t necessarily qualify.

’Everyone’s saying they’re doing hybrid cloud because, guess what, that’s what customers want. And if you look at what our competitors are saying about hybrid, it’s complete [nonsense],’ White said. ’We have to clarify what real hybrid [cloud] means versus what other people are saying.’

Andrew Brust, senior director, market strategy and intelligence at Datameer, a San Francisco-based data analytics vendor, said Microsoft’s background in the intensely competitive enterprise software market is something that neither AWS nor Google can match.

’There’s no replacement for the decades of experience and empathy that Microsoft has gained since it shifted from consumer and business units to enterprise and IT,’ Brust told CRN. ’Microsoft has done this fight. AWS and Google are just starting out.’

Chris Hertz, CEO of New Signature, a Washington, D.C.-based Microsoft partner, said he believes AWS and Google have alienated some customers through their aggressive marketing of public cloud.

’Amazon and Google put forward the blue sky idea that you could abandon on-premises solutions and just jump directly to the cloud,’ Hertz said. ’This may be true in some cases, but most companies need to support legacy line-of-business apps and cloud services and have them work together in a hybrid environment.

’Amazon and Google ignored the complexity that exists in many of their customers, rather than trying to help them solve and simplify it in a sustainable and achievable way,’ Hertz said.

Microsoft understands the importance of corporate IT and its mandate to ensure governance, compliance and security, according to Hertz.

An AWS spokeswoman declined comment. Google spokespeople weren’t immediately available for comment.

Jeff Aden, executive vice president of marketing and strategic development at 2nd Watch, a Seattle-based AWS partner, told CRN he doesn't think Microsoft’s background with enterprise customers is necessarily a big advantage in the cloud market.

Aden said AWS has done a better job than Microsoft at figuring out how to build a channel of cloud focused partners with specific areas of expertise.

’One of the key factors to AWS success with enterprises was leveraging partners to help them sell, deliver and execute on solutions. I think Microsoft is in the early stages of building that partner network and educating customers,’ Aden said.

AWS said in January that its annualized revenue run rate was approaching $10 billion. Neither Microsoft nor Google break out figures for their cloud infrastructure businesses, so it’s tough to do an apples-for-apples comparison with AWS.

Microsoft may have more experience selling to enterprises, but it still faces a tough climb in the public cloud. AWS accounted for 31 percent of the public cloud market at the end of 2015, compared to 9 percent for Microsoft, 7 percent for IBM SoftLayer and 4 percent for Google, according to figures from Synergy Research Group.