Windows Azure Turns 1 in 'Anemic' Market
On the anniversary of Windows Azure’s introduction, the cloud platform market targeted by Microsoft is dwarfed by infrastructure and software clouds.
Tue, February 01, 2011
Network World — One year after Microsoft introduced Windows Azure, the platform-as-a-service market is only about 1/20 the size of the rival infrastructure-as-a-service market led by Amazon's Elastic Compute Cloud, and about 1/50 the size of the software-as-a-service market.
While enterprises will spend $112 billion on public cloud services over the next five years, only a small fraction of that amount will be devoted to platform clouds such as Windows Azure, according to Gartner (IT).
So far, Windows Azure has 31,000 active subscribers and is hosting 5,000 applications, whereas competitors Google (GOOG) and Salesforce.com (CRM) each claim at least 150,000 applications on their platforms. Microsoft (MSFT), which opened Azure to the public on Feb. 1, 2010, acknowledges the market is a "longer-term play." Azure's leadership is in flux, with the departures of top executives Ray Ozzie and Bob Muglia.
"Platform-as-a-service adoption across the board has been lagging infrastructure-as-a-service and software-as-a-service," says Gartner analyst Richard Watson. "It's pretty anemic, especially when you talk about the enterprise market."
Gartner estimates 2010 revenue for platform-as-a-service (PaaS) at $140 million, compared to $2.7 billion for infrastructure-as-a-service (IaaS) clouds, according to an excerpt of a Market Profile report the analyst firm has not yet released.
PaaS revenue is expected to grow to $200 million in 2011 and to $650 million by 2014. But IaaS revenue will also soar to $4.4 billion in 2011 and $12.4 billion by 2014, according to the report.
SaaS revenues are expected to reach nearly $10 billion in 2011, and $20 billion in 2014.
Microsoft has said it believes platform-as-a-service is the future of the cloud market, despite the lackluster early adoption figures. While infrastructure-as-a-service clouds -- such as Amazon EC2, Rackspace Cloud Servers and GoGrid -- offer raw access to virtual machines and storage capacity, platform-as-a-service clouds give developers a more abstracted view of their cloud computing resources, making it easier to build applications.
While PaaS takes away some of the tedious management tasks required in IaaS clouds, PaaS offers less control over the underlying computing resources and makes it more difficult to move existing applications from an internal data center onto a cloud service.
"If you look at platform-as-a-service vs. infrastructure-as-a-service, IaaS makes it really simple to take an existing application, put it in a virtual machine and you're done," says Amy Barzdukas, general manager of server and tools marketing for Microsoft. "When you start looking at platform-as-a-service, some things are easy to migrate. Some things require applications to be rewritten. In many ways, it's really a longer-term play but we see the future of the cloud being in platform-as-a-service."