Cloud Wars Heating Up in 2014

Last December, Google launched its new cloud platform. In January 2014, Amazon Web Services offered free trials for about 100 of its most popular cloud services. And, in February, Microsoft named former Cloud and Enterprise Group chief, Satya Nadella, its new CEO.

Cloud Wars Intensify

All these changes signal a growing intensity to the “Cloud Wars,” as these three tech giants muscle for dominance in the lucrative cloud market.

While there’s no evidence that any one vendor will emerge as a clear winner, their moves are indicative of the importance of the cloud to both large enterprise vendors and small startups, and a measure of how ubiquitous the cloud has become in today’s business landscape, says Seth Robinson, CompTIA’s director of technology analysis.

[Related: 2014 Forecast for Cloud Computing]

“Cloud providers are definitely trying hard to gain marketshare, and they are offering more options than ever,” says Robinson. “While cloud infrastructure has thus far been dominated by Amazon, we see a scramble by other providers, both big and small, to get into that market,” he says.

Cloud Vendors Relying on Name Recognition

Large providers like Microsoft and Google, are relying on their name and brand strength to help grab customers who are late to the cloud, Robinson says. While many smaller businesses and start-ups may be willing to rely on less-well-known cloud service providers, many enterprises want the perceived comfort of sticking with a big name provider, Robinson says.

“Middle- or late-comers to the cloud are going to be most familiar with the traditional IT vendors like Google, Amazon and Microsoft, and it’ll be natural to them to see these big companies’ products and feel more secure evaluating and purchasing these solutions,” Robinson says.

But that reliance on well-known brands will only increase competition, as differentiation becomes key to gaining marketshare, according to CompTIA’s IT Industry Outlook 2014 report.

[Related: 10 Cloud Computing Predictions for 2014]

While smaller providers will continue to compete on price, Amazon, Google and Microsoft will emphasize features that separate them from the competition, whether that’s a reliance on legacy systems, easing companies’ transition to the cloud, or helping with administration and management of cloud solutions, Robinson says.

“Cloud providers will certainly compete on price, but will also offer unique benefits, such as ease of transition or access to bare-metal resources. On the flip side, managing many different cloud solutions will be a significant challenge for many organizations. Understanding cloud usage and making transitions between providers when needed will be areas where companies will require outside expertise,” according to CompTIA’s report.

“One of the real challenges is administration and management of these complex cloud solutions,” Robinson says, and that’s an area where the tech giants are focusing their efforts to gain and hold onto marketshare.

“Helping customers keep an eye on costs, performance and return on investment going to be a huge differentiator,” he says. “Having the management and monitoring capabilities, being able to choose the right solution for customers’ business and tapping into that broad base of knowledge that many customers just don’t have,” he says.

Still a Need for On-premises Products

And there will remain a need for on-premise solutions as enterprises continue to wrestle with security concerns in the public cloud, according to the report. The research shows approximately 24 percent of companies have moved applications back to on-premise systems after an initial cloud transition.

[Related: 3 Ways Enterprise IT Will Change in 2014]

“There’s still room for on-premises solutions, which will be another area for competition,” Robinson says. “Once businesses make that first move to the cloud, we find they often make secondary moves back to on-premise because of security and reliability concerns – so they end up with a hybrid model, with some applications residing in a public cloud and some in on-premise solutions,” he says.

CompTIA’s research cites security concerns as the major reason for enterprises’ backtracking, indicating that the most sensitive applications will remain on-premise for the foreseeable future.

“That’s a major boon for these large providers who maintain an investment in legacy systems,” Robinson says. “It gives them numerous product channels and options to keep and gain new customers and help them make the transition to the cloud.”

Sharon Florentine covers IT careers and data center topics for CIO.com. Follow Sharon on Twitter @MyShar0na. Email her at sflorentine@cio.com Follow everything from CIO.com on Twitter @CIOonline and on Facebook.