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SAN FRANCISCO – Amazon has reached staggering levels of dominance when it comes to the cloud. According to a report from research firm Gartner, Amazon Web Services has more than five times the combined capacity of its next 14 rivals in the U.S. market.
At CloudBeat on Tuesday, cloud executives discussed the opportunities for other players in the space. Do competitors have a shot against Amazon? Or should they simply give up and give in to the might of AWS?
“We’re in the first mile of the marathon. … This is not a sprint,” said Hewlett Packard‘s Sanjay Sharma, the director of the company’s cloud business unit. “There will be a number of large players as the market expands, and [there will be] a number of public clouds,” he said, echoing the sentiments of Pivotal chief executive Paul Maritz, who made a rare public appearance at the CloudBeat conference Monday.
Maritz spoke in detail about this idea of “multiclouds,” claiming that customers are fearful of vendor lock-in. In particular, he sees huge potential for open-source technologies in the coming years, notably OpenStack. HP is one of the top five contributors of code to the open-source cloud computing project.
Today’s panel argued that open-source cloud computing will help open up the market. Sharma and the other panelists stressed that adoption will be rapid.
Brian Hierholzer, the chief executive of Artisan Infrastructure, added that the ecosystem has witnessed the consequences of one player becoming a standard. For instance, Google being associated with search or VMware with virtualization. “Now it’s clear that if the industry allows one player to be dominant, that dominant vendor may turn on them.”
Amazon may dominate, but competition is increasingly flooding the industry. Niche players are eager to take on Amazon Web Services, and companies like Rackspace and Microsoft are vying for their share of the largest corporate contracts. Amazon currently makes $600 million a year from its contract with the Central Intelligence Agency alone. Its total revenues are estimated to be about $60 billion a year.
Sharma said that cloud providers can take on Amazon by catering the technology to specific verticals or markets. Customers in health care and financial services have their own set of regulations and challenges.
Likewise, Ludovic de Lesseps, the deputy chief technology officer of a French AWS rival called Numergy, suggested that cloud companies have a good shot in international markets.
“Regulation is different around the world,” he pointed out. Numergy received financial backing from the French government through its wealth fund, the Caisse des Dépôts. The goal is to provide technologies to keep vendors’ data secure. Amazon is frequently critiqued by the media for its security flaws.
Finally, customers are starting to adopt a hybrid cloud approach. Sharma said that HP’s customers increasingly operate a combination of public, private, and managed cloud services. Competition is heating up, with VMware and Rackspace touting the advantages of their hybrid cloud offering over AWS.
According to Sharma, Amazon is dominating now. But giants can fall: Android emerged as a competitor to Apple, and “Linux started small.” No vendor is immune from market shifts and competition.