How Cloud Computing Became a Big Tech Battleground | WSJ
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How Cloud Computing Became a Big Tech Battleground | WSJ

– [Narrator] IBM, Google, Microsoft, all are making big bets
on cloud computing. That’s for good reason. Research firm Gartner forecasts
cloud computing revenues to exceed $260 billion dollars in 2020. For years Amazon’s AWS led the market. But, that lead is starting to
slip as other firms make moves to bolster their cloud
computing offerings. In October, Microsoft
surprised onlookers when it won the U.S. military’s JEDI cloud contract. It could be worth $10 billion
dollars over 10 years. Some in Washington expect
Amazon to appeal this decision. In July, IBM spent $34 billion
dollars to acquire RedHat and boost it’s cloud business. So, why are tech firms going
to battle for cloud services? To understand, you’ve
got to know the basics. – Well, and like any market that grows it’s strong because it
offers a value proposition to people that they find attractive, and so they shift their spending. – [Narrator] Cloud computing at it’s core, is about changing the way
businesses manage data. Everything done online;
shopping, video, texts, it all takes data. The data is processed in behind the scenes computers called servers. Managing that equipment takes
time, energy, and money. When a business moves to the cloud it’s really just outsourcing. In other words, tech firms like Amazon handle some IT services so businesses can focus
on what they do best. Outsourcing IT can generate savings. For example, Bank of America
adopted hybrid cloud computing and that reduced annual costs
by $2.1 billion dollars. Start-ups who uses a
cloud provider won’t have to spend as much on a custom data center. They can use resources from a third party. In-house IT has to maintain
enough server space to account for peak demand. That can mean that your company
has a bigger data center than it needs on a consistent basis. Instead, cloud computing lets companies pool their resources. The companies use as
many servers as they need and only pay for what they consume. Companies that use the
cloud can benefit from the remote management of data in places like Ashburn, Virginia. Amazon, IBM, and others host
some of their data centers in less populated areas like this. Both energy and land can be cheaper here than say, a city center. That’s why you see groups like Facebook and the NSA opening data
centers in small towns in Utah. There’s potential for lower costs, the views aren’t bad, either. Cloud computing is tougher for
some businesses than others. In the years after the launch of AWS, businesses like Netflix, Lyft,
and Slack launched products with intense IT demands. They were a natural fit
for cloud computing. Some companies who are moving
to the cloud today are bigger, and are in more regulated industries like health and finance. They’re companies like J.P. Morgan which operates under strict standards from regulators like FINRA. In 2017, Dana Deasy was the
chief information officer. At the time, he moved portions of the financial giant’s data to the cloud. His next task will be
even more formidable, do the same for the Defense Department. – So, I’ve mentioned we have a need for an enterprise cloud, so we have massive compute
capability where we can start to store our data in a more common way and make it accessible. – [Narrator] The multi-billion
Joint Enterprise Defense initiative is supposed to centralize the military’s technology
and reap gains in innovation. Getting there will mean untangling years of disparate IT systems. That will take time, money, and expertise, which is why Microsoft’s
potential win is so significant. Amazon is no longer the only
big name in cloud computing. Microsoft’s Azure Cloud service
was announced three years after Amazon AWS took an early lead. More than a decade has passed and AWS still dwarfs Azure in revenues. But, more deals are on the horizon. – The cloud markets are
still relatively small. So, their growth rate naturally
is going to be higher. And we do see that growth
rate coming down slightly over time as the cloud markets get bigger. But, the strong growth rates
are still driven by the fact that people prefer cloud models
over the traditional models for a lot of their work loads. – [Narrator] Which is why you see the largest firms in tech
betting big on the cloud. Billions of dollars hang in the balance.


  • MusicUI

    Since there are so many online business, website and web app will continue to grow and the demand for cloud computing will rise.

  • YourBoyDom

    there is just one thing I don't like…. Public services who relies on private cloud computing and also the fact that since it's a game where the bigger sharks win, we could have issues giving all the data to just few hegemonic players.

  • Toool

    Cloud computing is great for those whom would rather pay a flatrate of their profits than invest in infastructure themselves, the middle-class startup business.
    If however you want anything serious, and depending on local laws wanting something legal, just get your own cloud going – you can pickup second hand servers for $100 each and coding is minimum today.

  • CagedLadie

    Sorry. I'd rather use dial up and store my stuff on a personal hard drive. This nonsense is worse than weapons of mass destruction.

  • Shaun Grace

    Imagine the waste drives if there was a blockchain memory system. Then imagine how much you'd actually have in revenue if said this to investors, we'll think about waste later, also they'll say, say again how we suck the pockets of the worker dry even if get secure data as the concequence..

    We all see the problem but balance is owning early stages and the earlier you make a system work for rich, fair or not fair, the longer it'll survive for them

  • XSportSeeker

    Is this an advertisement piece? How about giving the subject a more balanced coverage WSJ?
    Like talking about all the privacy and security problems that came with moving everything into the cloud. Like talking about how cloud storage had a surge and bubble burst back some years ago. Like how several of the high profile leaks that happened putting out the private data of millions of americans out in the open were about misused and badly configured cloud computing usage? How hacking groups are monitoring daily services provided by the likes of AWS because you will often find unencrypted badly configured databases there for the taking?

  • Vinyas Bhat

    Ambani the owner of " JIO " …said it already.."we will provide servers free of cost for all startups in India" …😅 Its gonna happen vry soon…This man is crazy..he provided completely free 4G(2GB/day) internet for whole India for 6 months… 😂

  • posteroonie

    I don't know how to square the 225 billion USD cloud market size at 4:15, and the pie chart at 3:44 showing AWS having almost half the market, with Amazon's AWS revenue being around 26 billion USD for the first 3 quarters of 2019.

  • Christopher N

    The cloud computing industry could be at risk though because these cloud providers have failed to properly secure the data. They need to implement solutions to offer the customer to encrypt their data before it is sent to the cloud. That way it is guaranteed to not be at risk.

  • Alexander Chychykalo

    AWS is still way ahead of everybody else. 60% of the growth rate for MS is confusing as we are talking about much smaller absolute numbers.

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