The Future of the Cloud: Will AWS Continue to Dominate?

Amazon Web Services has been the dominant player in the cloud computing market since it first launched in 2006. The cloud itself is projected to grow immensely in the next decade, and a decent percentage of that growth is directed at AWS, with research firms forecasting AWS’s revenues at $10 billion by 2016 and $20 billion by 2020.

As TechCrunch notes in the above article, Amazon has a first mover advantage due to the high cost for customers to switch providers. And according to Bernstein’s research, the majority of businesses they interviewed would not change IaaS providers even for a 20% discount, as switching would bring new risks and added costs in the re-development of tools on the new provider’s API. So AWS seems to be in a great spot.  But lately, we have started to wonder what the future of the cloud will look like.

James Staten, in his cloud predictions for 2013, thinks that we will stop equating the cloud with AWS. There are already other players making moves in the market, including Windows Azure, Google’s Compute Engine, Rackspace, Verizon, IBM, HP, etc. These haven’t yet made much of a dent, but Google recently announced increased investment in its cloud technology and Microsoft slashed its prices showing there are real competitors willing to go head-to-head with Amazon.

A Neovise analyst describes two battles in the IaaS market:  one for basic services such as computing, networking, and storage, and the other for higher-level services such as databases, security, disaster recovery, and running business applications. The former, he says, is where competitors are starting to grab market share while the latter is where AWS still entirely dominates.

It certainly will be interesting to see where the cloud computing market goes. New technologies might deflate AWS’s advantages or perhaps the cloud’s exponential growth will prove too big even for Amazon to scale fast enough leaving room for more players.

What do you think? Will Amazon maintain its leading position, or will companies like Google and Microsoft make a big enough impact to dominate? Tell us your thoughts in the comments below…