Microsoft is light years ahead of IBM, Oracle, and SAP in the cloud, analyst says

Satya Nadella Dreamforce
Microsoft CEO Satya Nadella Business Insider

Despite all the turmoil in the tech industry over the last decade, the four biggest enterprise software companies in the world remain Microsoft, IBM, Oracle, and SAP.

But when it comes to cloud computing market, where customers can swipe a credit card and get access to functionally unlimited supercomputing power, Microsoft is beating the other three hands down, according to a new report from analyst firm Forrester.

One important caveat before diving in: Of the so-called “big four” business software vendors, Microsoft is the leader with an estimated $US5 billion in annual cloud revenues, per this report.

But it’s still lagging behind Amazon Web Services, the $US7.3 billion juggernaut that basically invented the market.

That said, Microsoft CEO Satya Nadella was in charge of the Microsoft Azure cloud platform before he got tapped for the top spot, and he’s put that cloud at the very center of everything the company does. Similarly, Microsoft is pushing its seriously popular cloud software, including the Office 365 productivity suite.

Microsoft has a few key advantages compared to the other legacy players here, Forrester says.

First, it’s simply been in the market longer than the others, with Microsoft Azure hitting the market in early 2010.

This means that it’s had more time to grow Azure’s geographical footprint, talk to customers, and build out features. Oracle and SAP, especially, are latecomers to the market and are only starting to seriously build their platforms.

Second, Microsoft has a wider and deeper range of third-party partners, building tools and services that work with Microsoft Azure. Again, IBM is gaining ground on that front, with Oracle and SAP only just getting started.

It’s not all bad news for the other three. The repor says IBM s doing a good job of attracting developers to its Bluemix cloud service, largely by tying in complex enterprise systems like old-school mainframes and making them easy to work with.

Meanwhile, while Oracle and SAP are struggling to build a platform for companies to build new apps, their strength is in extending the software they already sell into the cloud.

The trick there, though, is that Oracle and SAP are also really strong at referring customers to their more traditional hosting services, where software is merely run in a server somewhere else, and not in what purists would call a “cloud,” the report says.

Oracle’s $US4 billion in claimed cloud revenue seems high for a company that’s still relatively early to the market, Forrester says, but it’s largely because “Oracle’s revenue reflects its liberal definition of cloud.”

It’s an interesting perspective, especially since Amazon Web Services just today announced its intentions to steal away unhappy Oracle customers with a bunch of competitive cloud services.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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