With Amazon, Google and Microsoft in the mix, can anyone else contend in public cloud?

If you ask Microsoft EVP Scott Guthrie who the players are in public, “massive-scale” cloud, he listsAmazon Web Services, Google and (surprise!) Microsoft. That appears to be the general consensus (though IBM would add IBM to that list, HP would add HP, and so on). The thinking is that massive scale requires super-massive investment and if vendor A hasn’t already poured $4 billion to $5 billion into cloud infrastructure, it’s over.

What I take away from that is when vendor A makes a big deal about putting $1 billion (or $1.2 billion) in cloud infrastructure at this point, it’s too little too late. With [company]Amazon[/company], [company]Google[/company] and [company]Microsoft[/company] sucking the air out of the room, can anyone else compete in public cloud?

The answer is — sort of. For startups with a clean slate, AWS has been the IT infrastructure of choice for a long time, but it’s starting to see competition. Microsoft CEO Satya Nadella claims that 40 percent of Azure revenue comes from startups and ISVs —  a stat that would be a lot more impressive without the ISV component. Startups tend to be Linux- and Mac-oriented, so if Microsoft could claim a big chunk of business from them, that would really be something.  (On its earnings call Thursday, Microsoft said cloud-related revenue, including that from Azure and Office 365, was up 125 percent year over year to about $1.18 billion.)

Microsoft CEO Satya Nadella speaks at a Microsoft Cloud event. Photo by Jonathan Vanian/Gigaom

Microsoft CEO Satya Nadella speaks at a Microsoft Cloud event. Photo by Jonathan Vanian/Gigaom

Google likewise has attracted (and bought) a range of startup workloads. The question most have is whether Google really wants to win enterprise workloads, but more on the enterprise later.

IBM SoftLayer is wooing startups as well with Silicon Valley events, aggressive pricing and free networking, but IBM, which just came off its tenth consecutive bad quarter, has a lot of macro problems that could give buyers pause. HP? Now that it’s launched its OpenStack Helion release, if the buyer wants to go OpenStack hybrid, it may be a good choice.

Zillion-dollar question: Who wins the enterprise?

In that huge demographic of older, established businesses with existing in-house infrastructure, there is a lot of nuance. Many of these companies will likely look to the public cloud that best mirrors what they already run. So [company]VMware[/company] shops might look at vCloud Air, Microsoft shops at Azure, [company]IBM[/company] sites at IBM SoftLayer and so on. The problem is that many of these big companies use products from all these vendors and so will have to decide which of those clouds best suits its needs.

Todd Ryan, architect lead at Kent State University, said he’s keeping an eye on IBM and VMware. “Niche features could capture some of the enterprise market,” he said via Twitter. But “for SMB market? No chance.”

Neither AWS, Google or Microsoft are probably on the radar for companies that run a ton of virtual machines (VMs) in house, said Joe Emison, CTO of BuildFax, a big AWS user and cloud watcher. They might be more interested in providers like IBM, [company]CenturyLink[/company], [company]Datapipe[/company] and the various telcos — all of which field public cloud options. And if the buyer has an existing relationship with a systems integrator, whatever that integrator recommends will probably get a look.


Lance Crosby CEO of IBM's SoftLayer business.

Lance Crosby CEO of IBM’s SoftLayer business.

IBM SoftLayer and [company]Rackspace[/company] offer fast bare metal capabilities that others players lack, but it’s unclear how much traction they’ve gotten.

“Performance-wise, bare metal is up there — although not with as much differentiation vs. AWS and Google as you might expect,” Emison said via email. Bare metal is also attractive from a security standpoint. But, he noted, “most people architecting for cloud embrace horizontal scaling, and to do that right you don’t really need better performance than you can get from VMs.”

Still, AWS the pioneer of public cloud is not standing still. It’s adding new enterprise friendly perks, including new AWS Directory Services that aim to ease the management of environments that mix on-premises Microsoft applications and AWS cloud resources.