You can’t go far in reading the tech press before coming across the term ‘cloud’, a term that causes no end of confusion. In the enterprise IT world, the public cloud refers to the setup where IT applications and capabilities are provided to a company by an external provider via Internet connections on a shared infrastructure. This means that the company can benefit from shared economies of scale as other customers use the same infrastructure, and the same scale also provides the opportunity to rapidly increase capacity as the business requires it. In theory, cloud computing should provide limitless capacity, often on a ‘pay-as-you-use’ basis.
A report by RightScale last week confirms Amazon’s AWS place as the undisputed king of the public cloud, with half of enterprises running applications on it. Nevertheless, Microsoft is making rapid progress in the runners-up position, increasing its market share from 11% to 19%.
This represents a major achievement for Microsoft. Unlike Amazon and Google, who built their business using web-based infrastructures, Microsoft comes from a PC heritage, and has had to invest an enormous effort into transforming its product offering, rolling out cloud based solutions such as Azure Cloud Services, Office 365, Sharepoint Online, and Exchange Online as well as its OneDrive consumer cloud service. It now appears that this strategy is beginning to pay off as it migrates its existing customers into the brave new world of the cloud. Whether it will make up the lost ground to Amazon is another matter.