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Cloud photo via Daniel Boyd
Cloud photo via Daniel Boyd

Although Amazon’s cloud services are facing more competition from Microsoft and Google, the Seattle retail giant continues to maintain a huge competitive advantage.

In a new report released today by Gartner, it found that Amazon Web Services, or AWS for short, not only increased its market share in 2014, but operates 10 times more capacity than the next 14 providers combined. The report specifically covered cloud infrastructure as a service, and does not cover cloud storage providers, platform service providers, or any other type of cloud service provider.

“AWS is a thought leader; it is extraordinarily innovative, exceptionally agile, and very responsive to the market. Although it will not be the ideal fit for every need, it has become the ‘safe choice’ in this market, appealing to customers who desire the broadest range of capabilities and long-term market leadership. It is the provider most commonly chosen for strategic adoption.”

While Amazon dominated, according to the report, Microsoft’s Azure platform was the only other competitor in close proximity, coming in at a distant second in terms of market share.

To illustrate the various companies’ standings, Gartner uses its famous Magic Quadrant, to rank a company’s ability to execute and their vision.

While Amazon and Microsoft were the only two leaders in the top-right corner, a handful of others fell into bottom right-hand corner, known as the “visionary” quadrant. They consisted of: CenturyLink, Google, VMware and IBM. Finally, trailing behind in the “niche” category are nine other players, including well-known names such as Rackspace, Verizon and NTT Communications.

Gartner's Magic Quadrant for cloud services worldwide places Amazon ahead of eveyone else at the top right corner.
Gartner’s Magic Quadrant for cloud services worldwide places Amazon ahead of everyone else at the top right corner.

Just yesterday, Google slashed its cloud computing prices by 30 percent, demonstrating just how cutthroat the competitive is, but Gartner said price cuts are not enough.

It docked Google for still being “in the rudimentary stages of learning to engage with enterprise and midmarket customers.” It said Google needs to expand its sales, solutions engineering and support capabilities because right now prospective customers report difficulties in getting Google’s attention.

Meanwhile, Microsoft Azure was praised for having a very complete package.

“Microsoft’s brand, existing customer relationships, history of running global-class consumer Internet properties, deep investments in engineering, and aggressive roadmap have enabled it rapidly to attain the status of strategic cloud IaaS provider,” it said.

Finally, while Amazon dominated, Gartner did have some words of caution.

One thing to note, it said, is that while Amazon is typically a price leader, it tends to charge separately for items that are often included with a competitor’s bundle. Additionally, Amazon may be spread too thin. While it’s introduced a ton of new services, it may have a hard time maintaining some of the less popular going forward.

While the Gartner report very much focused on the positive and negative attributes of the product, a separate report released by Synergy Research shows that Amazon also remains bigger than the competition in terms of revenues.

In the first quarter, Amazon disclosed its AWS revenues for the first time, saying it is a $5 billion annual business.

Synergy Research estimates that Amazon continues to grow faster than the market as a whole. Still, some of the smaller competitors are reporting impressive year-over-year gains. For instance, while Amazon’s cloud revenues jumped 49 percent in Q1, three other companies reported even more solid growth: Microsoft is the leader with revenues up 96 percent; Google also reported strong growth, with revenues up 74 percent; and IBM’s revenues were up 56 percent.

All-in-all, the reports show that the cloud wars are alive and well.

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