How AWS and Azure’s competition improves public cloud adoption

  • Public cloud spending is predicted to grow quickly, attaining 16% year-over-year growth in 2017.
  • Cowen’s AWS segment model is predicting Revenue and EBITDA to grow 25% and 26.8% annually from 2017 to 2022.
  • Microsoft Azure is viewed as the platform that customers would most likely purchase or renew going forward (28% of total vs. AWS at 22%, GCP at 15%, and IBM at 10%).

These and many other fascinating insights are from Cowen’s study published this week, Public Cloud V: AWS And Azure Still Leading The Pack (58 pp., PDF, client access reqd.). Cowen partnered with Altman Vilandrie & Company to complete the study.

The study relies on a survey sample of 551 respondents distributed across small, medium and enterprises who are using public cloud platforms and services today.  For purposes of the survey, small businesses have less than 500 employees, medium-sized businesses as 500 to 4,999 employees, and enterprises as more than 5,000 employees. The study provides insight on a range of topics including cloud spending trends, workload migration dynamics, and vendor positioning. Please see pages 5,6 & 7 for additional details regarding the methodology.

The more AWS and Azure compete to win customers, the greater the innovation and growth in public cloud adoption as the following key takeaways illustrate:

Existing public cloud customers predict spending will grow 16% year-over-year in 2017

Existing mid-market public cloud customers predict spending will increase 18% this year. SMBs who have already adopted public cloud predict a 17% increase in spending in 2017, and enterprises, 13%. Public cloud providers are the most successful upselling and cross-selling mid-market companies this year as many are relying on the cloud to scale their global operations to support growth.

Public Cloud Spending, 2017

AWS dominates awareness levels with SMBs who have existing public cloud deployments, with Microsoft Azure the most known and considered in enterprises

Consistent with many other surveys of public cloud adoption, IBM SoftLayer scored better in enterprises than any other segment including SMBs (71% vs. 58%). Google Cloud Platform has its strongest awareness levels in SMBs, attributable to the adoption of their many cloud-based applications in this market segment. They trail AWS, Azure, and SoftLayer in the enterprise, however. Across all existing companies who have adopted public cloud, the majority are most aware of AWS and Microsoft Azure. The second graphic provides an overview of awareness across the entire respondent base.

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Microsoft is the most-used public cloud and the most likely to be purchased or renewed by 28% of all respondents

While AWS is the most reviewed public cloud across all respondents, Microsoft Azure is the most used. When asked which public cloud provider they are likely to purchase or renew, the majority of respondents said Microsoft Azure (28%), followed by AWS (22%), Google Cloud Platform (15%) and IBM SoftLayer (10%). The following graphic compares awareness, reviewed and use levels by public cloud platform.

Comparative Analysis Of Most Used Public Cloud Provider


Only 37% of current Azure users expect to add or replace their public cloud provider, compared to 53% of current AWS users and 50% of GCP users

The study found that approximately 40% of respondents expect to add or replace their cloud provider in the next two years, compared to 43% who predicted that last year. Companies who have adopted Microsoft Azure are least likely to replace/add other vendors, as only 37% of current Azure users expect to add or replace, compared to 53% of current AWS users and 50% of GCP users.

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AWS and Azure dominate all seven facets of user experience included in the survey

AWS has the best User Interface, API Complexity, and Reporting & Billing. Microsoft Azure leads all Public Cloud providers globally in the areas of Management & Monitoring, Software & Data Integration, Technical Support and Training &   Google Cloud Platform is 3rd on all seven facts of user experience.

user


18% of workloads are supported by public cloud today with SMBs and mid-market companies slightly leading enterprises (16%)

Overall, 38% of all workloads are supported with on-premise infrastructure and platforms, increasing to 43% for enterprises. The following graphic illustrates the percentage of workloads supported by each infrastructure type.

Infrastructure


77% of existing public cloud adopters are either likely or very likely to add a SaaS workload in the next two years, led by mid-market companies (81%)

SMBs (76%) and enterprises (73%) are also likely/very likely to add SaaS workloads in the next two years. The majority of these new SaaS workloads will be in the areas of Testing & Development, Web Hosting, and e-mail and communications.

Comparing


Cowen’s AWS segment model is predicting Revenue and EBITDA to have a five-year Compound Annual Growth Rate (CAGR) of 25% and 26.8% from 2017 to 2022

AWS Net Income is predicted to increase from $2.7B in 2017 to $8.2B in 2022, attaining a projected 24.5% CAGR from 2017 to 2022. Revenue is predicted to soar from an estimated $16.8B in 2017 to $51.5B in 2022, driving a 25% CAGR in the forecast period.

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