Cloud Wars Go Global: How Amazon, Microsoft, Google and Alibaba Compete in Web
Services
Cloud computing is defined as on-demand access to various computing services such as
applications, servers, data storage, databases, networking and information intelligence. Developed
in 2006, it has transformed the way computers and software interact and operate with one another.
All the world’s leading businesses ranging from content based and Fortune 500 companies to
innovative startups have integrated cloud into their operations. Cloud computing has evolved into
becoming a building block in the digital economy and the basis of ecosystems that enable industry
specific digital transformation and development of new products and services. Service providers
such as Amazon Web Services (AWS), Google Cloud Platform (GCP), Microsoft Azure, and
Alibaba that have “plug-and-play” cloud services are highly appealing to organizations that are
looking for pay-per-use services that can be scaled up or down based on usage. In this paper, we
will be discussing the rising prominence of cloud computing and how it enables digital
entrepreneurship along with analyzing the different cloud functionalities and localization
strategies that key players are offering in order to stay ahead of the competition.
Though most of the world’s leading digital businesses are already utilizing the cloud to
run their IT operations, there are still many companies still left to implement it. There are many
reasons for this, but the primary one is the lack of understanding of the many advantages that
cloud computing offers to users. First, it lowers the cost of establishing and maintaining IT
services by reducing the need for the business to invest in fixed equipment and physical data
centers.1 Second, cloud systems are easily scalable as the organization grows their customer
relationship management or other programs based on requirement.1 There is a reduction in total
cost of ownership (TCO) of IT infrastructure. Third, hosting applications, programs and systems
on the cloud provides data-recovery safeguards that would not viable otherwise in event of
disasters or damage to IT equipment.1 The cloud enables companies to build apps, solutions and
other analyses as it provides greater security. Fourth, cloud computing increased mobility and
collaboration even when teams work remotely as they have access to work-streams in real time.1
With a recent increase in concepts of working on the move has created a huge demand for cloudbased technology. Lastly, large cloud service providers have played a vital role in providing
organizations of all sizes to embrace digital transportations.1 It has also served as a platform to
encourage growth in digital entrepreneurship where entrepreneurs are able to test their innovative
ideas more efficiently and cost effectively.
Cloud computing rose to significant with the introduction of Elastic Compute Cloud
(EC2) by AWS in 2006. Microsoft Azure followed suit in 2010 and Google Cloud Platform
(GCP) released in 2013, however Amazon continued to dominate the market. As the adoption of
cloud computing was already significant within North America and Europe, the top players in
cloud computing are in a race to acquire the Asia Pacific market as it has projected growth of
cloud serves and infrastructure to reach $76.1 billion.1 The top providers are developing systems
and data centers in order to cater to and deliver high end performance to Asia Pacific clients. In
this instance, though Amazon globally dominates, providers such as Alibaba have an advantage
due to their domestic market.
Arguably the top four players in the cloud computing market are Amazon, Microsoft,
Google, and Alibaba. Web services are just a fraction of these provider’s business, as their rise to
1
dominance has changed the business model to one that collected massive amount of user data
which are analyzed and utilized to create profit. Amazon Web Services was the first to gain
prominence and grow rapidly with its advanced system. Amazon’s cloud became the backbone to
a lot of Amazon services and products ranging from Alexa and to the e-commerce site. Amazon
saw a growth of 37% in 2018 and then 34% in its cloud revenue.1 Microsoft Azure, launched two
years after AWS, was prominent among multinational corporations that used MS software like
windows or office since it was developed using Microsoft’s own digital software. Microsoft’s
strategy to combat AWS’s dominance was to target clientele that avoided AWS due to perceived
conflict. It also targeting the healthcare, retail and financial service industries, having a strong
clientele in companies like Dell, British Heart Foundation, Samsung and DBS Bank. Azure’s
revenue grew by 62% in 2019.1 GCP was also technically advanced and its focus on machine
learning and AI gained tractions among banks and financial services firms. Analysists predicted
that Google would gain prominence over time as companies would choose GCP over AWS or
Azure for its lower pricing and higher speed. It has seen 53% increase in revenue in 2019 from
previous years, proving to have potential as a strong competitor.1 Alibaba Cloud grew out of
Alibaba’s e-commerce ecosystem and was providing services to other online businesses. As the
leading cloud provider in China, it was growing rapidly due to its Chinese customer base and was
in the process of expanding globally with its airline clientele Cathay Pacific and Air Asia.
Leveraging its sales from its e-commerce platform, it saw a growth of 62% in 2019 however it
was predicted that the Covid-19 pandemic would inhibit their growth.
With governments like the European Union passing regulation on data localization laws,
companies were pushed to implement data storage in local servers and require encryption
products and services. The goal of this mandate was to break the dominance of US and China in
cloud infrastructure. In order to secure localization, Amazon and Microsoft adopted a ‘top-down’
approach where it acquired clients through key decision makers in companies, while Google and
Alibaba adopted a ‘bottom-up’ approach where the IT teams advocated their products and
services to acquire clients.1 Though Alibaba has significant growth with localization in various
markets in China, the top three players have a significant advantage over Alibaba in terms of their
expanse and diversity of services.
Service providers AWS, Azure and GCP are leading the cloud computing industry as it
rapidly gets integrated into business systems. Though AWS has been dominating the field thus
far, it is important to consider if they will ultimately win the race in acquiring the worldwide
market share by 2025. Azure, GCP, and Alibaba show strong competition with their various cloud
computing strategies, however, with Amazon’s diverse clientele and robust localization approach,
it is likely that they will continue to control the cloud computing arena.
References
1
Davis, Jason. Yang, Anne. “Cloud Wars Go Global: How Amazon, Microsoft, Google and
Alibaba Compete in Web Services.” Instead. The Business School for the World. Harvard
Business Publishing. 2020. pp.1-11.
2