The Big Story

Squaring the cloud

During a truly remarkable year, the cloud computing market hasn't really changed a bit.

That's perhaps the quickest summation of Gartner's latest Magic Quadrant report for the cloud, which trickled out last week ahead of the holiday weekend. The positions of the three usual suspects within the holy matrix were unchanged with this latest edition: top right, firmly in the "leaders" quadrant, in the order you'd expect. But Gartner did expand its evaluation of the major providers to include their platform services, which underscores how far cloud providers have moved beyond compute and storage to offer dozens of higher-level application-building services, databases and even data center services like AWS Outposts and Azure Stack.

The most interesting reading in the report reveals the weaknesses that Gartner sees in the Big Three providers, based on its discussions with vendors and customers. AWS, Microsoft Azure and Google Cloud all offer a complete set of cloud services that can accommodate the needs of almost any enterprise, but they offer those services in different ways and have institutional quirks that set those megacompanies apart.

Let's unpack a few of those.

AWS remains the undisputed leader in cloud computing, as it has since the term was introduced, but it's not without flaws.

• AWS' qualifications are well understood: It has more market share than its competitors combined and has been running high-end cloud services for longer than those companies have been in the market.
• You'd think being part of one of the biggest corporations on earth would be a plus, but Amazon's retail ambitions have led big companies like Walmart and Target to work with Amazon competitors to improve their retail services.
• AWS has a lot of "good enough" services that don't always mesh with other services developed by the company. That can make life a little confusing for the average buyer, according to Gartner, but it also allows competition from smaller, more-focused software companies that do one thing and do it well.
• Early cloud buyers enjoyed regular price decreases from AWS, but that's no longer the case across the breadth of its services to the surprise of new customers.

Microsoft has emerged as AWS' biggest rival thanks to decades of business relationships with huge enterprise companies and a bet-the-company pivot to cloud services in the middle of the last decade.

• But Microsoft's biggest challenge continues to involve its infrastructure strategy, which reared its head in the early days of the pandemic, especially in Europe.
• AWS and Google Cloud offer "availability zones," or dedicated, autonomous data centers within a given cloud region for resiliency. Microsoft has been slower to roll out backups within its dedicated regions, touting its overall reach.
• That means Microsoft can't guarantee cloud capacity, which is one of the main selling points of outsourcing your computing to a provider.

For its part, Google has come a long way in the last few years, improving its position against AWS and Microsoft from both a product and market share standpoint, according to Gartner.

• Yet it continues to lag the two leaders when it comes to developing business relationships with independent software vendors and large enterprise customers, which was one of Google Cloud CEO Thomas Kurian's mandates when taking over the group last year.
• After curiously proclaiming itself the most reliable cloud in the business at Google Cloud Next 2019, Google went on to have an awful year of outages and downtime, "with devastating impact on customers," Gartner said.
• And Google Cloud's future isn't even certain: It's a small and arguably nonstrategic business for an advertising company, and reports that it might exit the business in a few years absent significant progress make it harder for enterprise companies to make a long-term commitment.

The rest of the pack Gartner calls "niche players," and that includes Alibaba, Oracle, IBM and Tencent, listed in order of Gartner's opinion of their "ability to execute."

• Alibaba and Tencent are good options for companies that do a lot of business in China, but trail the Big Three U.S. providers in terms of overall capabilities.
• Oracle drew praise for expanding its cloud infrastructure capabilities and reach, but Gartner pointed out that the database pioneer still trails way behind the competition in cloud databases.
• And IBM remained on the playing field but, thanks to years of underinvestment in cloud services, is considered best for "lift and shift" cloud migrations, a short-term modernization fix that can actually cause long-term problems.

This overall mix of companies has been more or less the same over the past five years, a period during which the cloud became mainstream. As cloud latecomers start to put more of their applications into cloud servers, look for changes in how both the major cloud providers and the challengers react to new types of demand to understand how the market will evolve over the next five years.

So far, there are no "visionaries" — the name Gartner gives to upstarts with good ideas that haven't quite figured out how to put the pieces together — in infrastructure cloud computing. That won't last forever.

JOIN US TOMORROW

Join us tomorrow at 9 a.m. PT for a deep-dive conversation on the state of the cloud. Tom Krazit will explore how best practices for cloud computing are evolving during an unprecedented economic period, featuring PagerDuty CEO Jennifer Tejada, Okta CIO Alvina Antar and Novant Health CDTO Angela Yochem. This event is presented by Pure Storage.

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This Week On Protocol

Tux bucks: The Linux Foundation is one of those groups that everybody in cloud and enterprise computing talks about, yet it flies under the radar of the larger tech industry. After talking to a bunch of those cloud and enterprise folks over the last few weeks, they seem conflicted: It's hard to imagine open-source software succeeding to the extent it has without the support of the Linux Foundation, but has the "antiestablishment" group become The New Boss?

Getting edgier: After last week's Computing at the Edge event, we interviewed several members of our Braintrust community on how edge computing will fit into their plans over the next few years. The pace of this evolution seems likely to depend on the buildout of 5G networks, but as it happens it will also have profound impacts on the way software is developed.

Onboarding for onshoring? Over the next two years, Infosys will have hired 25,000 people in the U.S., company president Ravi Kumar told Protocol's Shakeel Hashim. The Indian company made its name hiring workers for "offshoring" business tasks that U.S. companies didn't want to do in-house, but it now sees an opportunity to improve the speed at which it can deliver those services by tapping into the U.S. community college system.

Five Questions For...

Gus Robertson, senior vice president and general manager, NGINX

What's the best piece of advice you could give to someone starting their first tech job?

Do your job and do it well, but also look after others. Tech is sometimes associated with being competitive, but it's important to contribute to the company culture by staying mutually accountable. Especially in these unusual times, it's important to enjoy the people you work with.

What has changed the most at your company over the past several months?

I think we'll look back at this period in time and realize how important culture is to driving company results. We now live in a world where many of us have access to the same technologies and tools thanks to cloud, open source and SaaS. If the tools and technologies are the same, then it's really the people that set us apart and drive competitive advantage.

What was the biggest reason for the success of cloud computing over the past decade?

Simplicity. Cloud made technology simple so that developers could provision, program and deploy it on their own. This allows developers to focus on creating stellar apps that deliver amazing experiences for their users, at a velocity that wasn't possible before cloud.

What will be the biggest challenge for cloud computing over the coming decade?

For customers, it's lock-in. The simplicity of clouds makes it easy to consume services native to that cloud. However, you can find yourself locked into that cloud provider. This is especially true if your developers are coding these cloud services into the business logic of an app.

Will the pandemic usher in a new era of remote working, or will we all come back together when it is safe to do so?

We'll never go back to things exactly as they were. Many workers have found new rhythms, working patterns, and flexibility in how they care for themselves and others. Office life will resume, but not at the same level as before the pandemic, and I think that's a good thing. I think we'll take the best from remote working and marry it with the best of office working, giving employees more choice about how and when they choose to work.

Around the Cloud

• Slack shareholders shrugged off the company's 49% revenue growth during the last quarter and instead fixated on slower-than-expected billings growth, sending the company's shares plunging in after-hours trading following Tuesday's earnings report.
• The rise of early DevOps pioneer Chef may have been stunted by the explosion of cloud computing, but it still doubled the money it raised in a $220 million sale to Progress Software.
• Sumo Logic set the price range for its upcoming IPO planned for Monday, when 14.8 million shares will be available for somewhere between $17 and $21 a share.
• Snowflake had some good news about its IPO, which is also set to happen soon: It announced that Warren Buffett's Berkshire Hathaway and Salesforce Ventures had each agreed to purchase $250 million of Snowflake's stock when it hits the market. Berkshire Hathaway will also buy a little more than 4 million additional shares.
• Google introduced new no-code development tools during the last sessions of its virtual Google Cloud Next event, building on its acquisition of Appsheet last year to allow regular folks to build business applications without bugging the developers.
• Enterprise software is so hot, even Uber is getting involved.Uber Freight introduced new software tools for trucking customers that need help managing new logistical patterns altered by the pandemic.
• Box CEO Aaron Levie is an enterprise software veteran at this point, and he shared a variety of thoughts on the market, the pandemic and President Trump during a wide-ranging interview with OneZero.
• Speaking of Trump: The New York Times took a look at the cozy relationship between the president and Oracle as the tech world awaits the outcome of the TikTok drama.
• The Department of Defense reaffirmed its JEDI contract decision: It will still be awarded to Microsoft, after a brief review of one pricing stipulation. AWS will continue to appeal.
• Nutanix is working a little closer with Microsoft these days, revealing plans to let its hyperconverged infrastructure customers manage Azure cloud instances from their own hardware.
• Your regular reminder that hardware is hard. One reason Facebook has maintained high levels of reliability on one of the most used services in the world is because it has developed a system for managing inevitable hardware failures, such as one in 2017 caused by "a snake [that] crawled into the power infrastructure and caused a short in a main switchboard power device," which is not good.

JOIN US TOMORROW

Join us tomorrow at 9 a.m. PT for a deep-dive conversation on the state of the cloud. Tom Krazit will explore how best practices for cloud computing are evolving during an unprecedented economic period, featuring PagerDuty CEO Jennifer Tejada, Okta CIO Alvina Antar and Novant Health CDTO Angela Yochem. This event is presented by Pure Storage.

RSVP today