Cloud Competitors Nip at AWS’ Heels
Well-established cloud service providers remain enterprises' partners of choice, but challengers are nipping at their heels as more organizations turn to cloud for myriad infrastructure needs, a new report found.
Enterprise IT purchasers kept Amazon Web Services (AWS) atop the provider list for Infrastructure-as-a-Service (IaaS), according to the 451 Research Vendor Window assessments for IaaS. In fact, 57 percent of enterprise IaaS customers rely on AWS, compared with 42 percent who use Microsoft Azure, the report found. IT professionals are most likely to mention Azure as the provider they will evaluate as their next IaaS supplier.
Like many rapidly growing midsize organizations, online grocer Door to Door Organics is banking on cloud to help attain its ambitious, multi-state business growth goals, weighing the advantages of Amazon Web Services against competitors such as Microsoft Azure.
The natural and organic online grocery store sells subscription memberships of weekly organic food deliveries to approximately 20,000 customers in 32 cities across 12 markets from five warehouses, and plans to soon add another warehouse, Chief Technology Officer Greg Lems told Enterprise Technology. Flush with the recent investment of $25.5 million in Series B financing from the Arlon Group, Door to Door plans to spend some of that money on technologies that will further enhance customers' e-commerce experiences, improve scalability, and extend security, disaster recovery, and fail-over, he said.
Lems, like a lot of his tech peers, spends much of his day working with business departments to ensure IT is fully integrated and fully understands the company's mission and goals, and to ascertain how technology can eliminate business hurdles and fully tap opportunities. Increasingly, that involves using cloud to liberate the technology team to focus on creative, revenue-generating or productivity-boosting tasks instead of maintenance, break-fix, or other routine chores, he said.
"We regularly have cross-functional meetings across the company – marketing, merchandising, product buying – about this unique model we have, and how do we leverage technology to make it more successful. Several really great initiatives have come out of that," said Lems. "I've only been here two months and have been growing that. They all want to use technology to move forward. Really a lot of it is around efficiency and how we get things done, and using software to get things done better."
Door to Door's customers are health-conscious, and many use wearable health trackers. One initiative: Figuring out how to tie in to these devices to the company's e-commerce, enterprise resource planning (ERP), logistics, and other applications, he said.
"From an online experience, I'm seeking to understand before I seek to be understood. We're in an ever increasingly connected world. People have Fitbits and all manner of health-related technology and people who buy from us are very health-conscious. What is the technology that connects those together? What can we provide to that? That's what we've been looking into," added Lems.
To do this, Door to Door – and many other fast-growing midsize and large enterprises – increasingly turns to cloud service providers to take on some tasks.
Enterprise IT purchasers kept Amazon Web Services (AWS) atop the provider list for Infrastructure-as-a-Service (IaaS), according to the 451 Research Vendor Window assessment for IaaS, released this week. In fact, 57 percent of enterprise IaaS customers rely on AWS, compared with 42 percent who use Microsoft Azure, the report found. IT professionals are most likely to mention Azure as the provider they will evaluate as their next IaaS supplier.
In 2014, Rackspace took itself out of the acquisition market, named Taylor Rhodes as CEO, and announced it would focus on managed cloud, a move that apparently paid off given the company's success in the 451 Research report.
"Rackspace is on par with AWS for its ability to fulfill customer IaaS needs and is the highest-rated IaaS provider for Guaranteed SLAs, consistent with Rackspace’s new managed cloud positioning," the researcher wrote.
"While the 2015 Vendor Window for IaaS shows Amazon Web Services as the clear leader based on multiple metrics, Microsoft Azure, Rackspace and VMware’s vCloud Air are becoming competitive challengers," said Michelle Bailey, Senior Vice President, Digital Infrastructure and Data Strategy, in a statement. "As more mainstream customers move business-critical workloads to cloud environments, the decision criteria for evaluating potential vendors change relative to early cloud adopters, and in turn so do the vendors under consideration."
IT organizations continue to invest heavily in on-premise private cloud, the approach Door to Door currently takes. Seventy percent of enterprises surveyed use VMware ESX and vCloud solutions, according to 451 Research. VMware and partner solution Cisco UCS garnered the highest ratings for promise and fulfilment, especially in terms of company brand and platform reliability, the study found. However, more than 70 percent of VMware's customers also had deployed an alternative cloud platform such as OpenStack, CloudStack, or Microsoft Cloud OS, said Scott Ottaway, vice president of Cloud Services and Data Research at 451 Research. Open source solutions, including those from major hardware vendors including HP, IBM, Red Hat, and Citrix, increasingly place pressure on VMware's dominance, especially for mobile and cloud-native applications, he said.
When it comes to hosted private cloud, 34 percent of those surveyed currently use this approach – but the market is highly segmented. Cloud providers with less than 3 percent marketshare represent more than half currently used vendors, the report found. Rackspace took one-fifth of the market, and enterprises also cited Verizon, CenturyLink, AT&T, and VMware vCloud Air, 451 Research said. Perhaps unsurprisingly, enterprises are most likely to use this platform for mission critical applications. Organizations that moved too quickly into cloud may consider moving applications or data back onto private cloud after a post-transition review, CompTIA found in a study released in March.
For its part, Door to Door is considering how it will use cloud to help further its business goals. The company wants to use the infrastructure in areas such as disaster recovery, fail-over, and automation for service level agreements, said Lems. "We're in a hosted environment so at least we don't have to maintain our own equipment. It's private, but we're looking at private. Absolutely cloud is going to be key to us for growing at the rate we want to grow at."
Lems primarily is weighing AWS versus Microsoft Azure. While working at EDS several years ago, Lems used AWS and that experience created a high comfort level, he said.
"Amazon has the zones within in the regions so you can go across zones or you can go across regions. There's great flexibility out there. There are a lot of options. They're compelling but, I will say, expensive as well. They have some great tooling but you have to balance that with your budget," said Lems. "As we looked into Azure, you can run Microsoft or Azure in both AWS or Azure so there's less of a compelling story there. It's all really about comparing feature set and cost."