Amazon has such a huge share of the global cloud market it would appear none of its competitors, including Internet behemoth Google, could ever catch up.
That may not be the case.
Google, according to industry analysts, is positioning itself to take on Amazon's dominance. Despite how far back it's lagging today, Google could catch Amazon and some day supplant its top position in the cloud.
"Amazon essentially has more than 80% to 85% of cloud market share in terms of providing platform as a service," said Jagdish Rebello, a research director with IHS iSuppli. "The market is in its infancy, and Amazon sort of created the market so it's got an early lead. It's not a player to be sneezed at. But somebody like a Google could catch up with them."
Aside from holding as much as 85% of the market today, AWS has more than five times the compute capacity in use than its next 14 competitors combined, according to a 2013 Gartner report.
Business isn't slowing for AWS either.
Amazon reported last week that in the first quarter ending March 31, sales for Amazon's "other" category, which includes AWS, grew by about 60% year-over-year. That put sales around $1.2 billion for the quarter, compared to $750 million for the same period in 2013.
The company, which originally made its name as an online bookseller, also has a rich ecosystem that competitors like Google can't touch at this point.
"Where Amazon steps ahead is in its ecosystem," said Lauren Nelson, an analyst with Forrester Research. "It has the largest ecosystem out there. You can use their long list of offerings and it's ready to deploy super quickly and it's very automated and scalable. There are thousands of companies that all the work they do is on top of AWS. Some do security. Some handle compliance issues. There are a lot there."
Can Amazon hold that position in the long term, especially in the face of increasing competition? Google is considered to be in the forefront of that challenge, but it's not alone. After essentially having the public cloud market to itself for years, Amazon is watching warily as companies like Microsoft, IBM, Hewlett-Packard and Verizon make their own push.
There's even talk that Facebook is positioning itself to join the fray and build its own public cloud service.
With those challenges ahead, Amazon's continued growth and dominance may come a lot harder.
Google, meanwhile, has the best chance of succeeding in its advances on Amazon. According to analysts, Google, the company that dominates online search, stormed the mobile world with Android and eclipsed free email offerings with Gmail, is primed to take on Amazon. Neither Google nor Amazon would offer comment for this story, but here are five reasons that Google can catch up to Amazon.
1. The market is young and prone to change
AWS has been around for eight years and other companies have dived into the cloud business, but enterprises and smaller companies are still getting comfortable with storing their data on remote servers on the Internet. The cloud computing is still relatively small but it's quickly ramping up.
Forrester last week released a report showing that the public cloud market is set for what it calls "hypergrowth." Forrester said the market is expected to reach $191 billion by 2020, a 20% increase over Forrester's last forecast, in April 2011.
"Today, the cloud is small but exploding," said Jeff Kagan, an independent industry analyst. "We're still in the first inning in the game ... Remember how big Blackberry was? Then Apple came out with the iPhone and changed everything. It happens."
Kagan said the cloud computing industry will grow and change -- a lot -- over the next five to 10 years, and the companies in that space will have to grow and change too.
"Typically, the first companies that lead are not leading five or 10 years from now," he said.
2. Google has the name and deep pockets
Amazon has strong brand recognition, but when people think of the company, many still think about going to Amazon.com to buy a book or a pair of running sneakers. Google, meanwhile, is a name that enterprises well recognize.
"When people think about Amazon, they think about the Kindle and the retail angle," Rebello said' "A lot of enterprises are using Google Docs and they're using Gmail. People also are familiar with the Android OS. When you look at it from an enterprise IT perspective, you see that Google is offering services, so you figure you can't go wrong with bringing Google into the equation."
Along with that name recognition come some deep pockets.
Amazon surely isn't searching the couch cushions for change, but Rob Enderle, an analyst with the Enderle Group, said the company doesn't have the deep pockets that Google does.
"Amazon spends pretty much what they pull in," he added. "Google is loaded. If Google decides this is really strategic, they could really surprise Amazon. Google could outspend Amazon any day of the week."
Several analysts noted that most companies moving into the cloud are using multiple services. It's a new area and these companies want to compare services and find out which one works better and which one is more reliable.
That means a lot of new users may give Google, a name they know, a try. If Google throws a lot of its financial muscle behind its cloud effort, that will open up the possibility that Google can win over those users.
3. Google needs to attack pricing
Armed with massive coffers, Google is pushing down the price of using a public cloud, forcing Amazon to follow its lead.
Google executives have said cloud pricing should follow a Moore's Law-like pattern, falling by a factor of two every year. That's aggressive and Google seems to be pushing that strategy forward.
For example, in March, Google slashed its pricing. Google Compute Engine now costs, on average, 32% less. Google Storage also has been cut, on average, 68%, while prices for Google BigQuery on-demand analysis services were cut by as much as 85%.
The day after Google's pricing announcement, Amazon Web Services followed with what was its 42nd price reduction since it started the business. For instance, the price of Amazon's Simple Storage Service was lowered by an average of 51%.
"If you think about one of the key drivers of enterprises moving to the cloud, it makes it possible for many small to medium enterprises to have an IT department with minimal upfront capital expenses," Rebello said. "Google is trying to attack the pricing equation. If they do that while also attacking security concerns, then they are attacking the barriers to adoption."
Google, he added, has the tenacity to aggressively drive down prices to lure in both businesses new to the cloud, as well as drawing in what had been AWS customers.
4. Google may be making big capital investments
Without offering specifics, Google executives said in an earnings call this month that it is focused on capacity and investing capital to make sure it has more than enough capacity to meet clients' needs.
"Google is making the capital investments it needs to alleviate some of the concerns an enterprise IT manager might have about going with their cloud services," Rebello said. "If your data is sitting in the cloud, enterprise IT is going to worry about security and having the processing power when you need it. Google wants to make sure you have the power when you need it." That, he added, will make Google a better choice when IT administrators go shopping for a cloud service.
5. Google's future strategy hinges on the cloud
Google is placing the cloud at the center of its strategy to enable the company to remain a major Internet player in the years to come.
Early this year, Google bought Nest Technologies, a company that makes a smart-home thermostat that can be programmed from users' mobile phones. Google spent $3.2 billion in cash for the company that will put Google squarely in the connected-home market.
Rebello pointed out that Nest is also a cloud-based player.
The smart thermostat will sit in people's homes but its smarts will reside in the cloud. Since Nest is just the first step into a smart home that will have smart appliances, smart door locks and windows, the cloud will be needed to store all of that new information in the trend known as the Internet of Things.
"If you talk about a future where lights, doors, windows and appliances are all connected through a digital gateway, the thermostat is just one element, but it's a key element that can learn consumer behavior and adapt to it," Rebello said. "This is all a cloud strategy. If Google wants to be a player in this smart home market, it needs the cloud behind it."
Google's focus on the cloud is unlikely to waver, making it a long-term challenger to Amazon's cloud dominance.
Many people in IT say the future lies in the cloud. They're just trying to figure out how to get there, how fast to get there and which service they'll go with. That opens a big door for Google.
"I don't think we'll be looking at a company that's in the number one position steadily," said Kagan. "It'll be an ebb and flow. I would say Google and Amazon will be beating the heck out of each other."
This article, 5 reasons why Google can catch Amazon in the cloud, was originally published at Computerworld.com.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is firstname.lastname@example.org.
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This story, "5 reasons why Google can catch Amazon in the cloud" was originally published by Computerworld.