Most consumers may not realize it, but there’s a furious battle playing out on the Master Network, the Internet, as they browse the products of everyday use.  The idea of “the cloud” is akin to “Virtual Reality” for most people, some non-physical location parked off to the side on the mystical Internet, where some of their files live.

But for businesses, the move to the cloud is something which causes them to stay up at night.  It’s the logistical headaches of deciding what files can be moved to the space in the sky, what programs they can run off-site, or which business functions can be trusted company – are all very important for firms that must balance accessibility, Security and immediacy.

For the industry’s largest companies, that means a huge business opportunity – and that has sparked heavy competition among companies looking to manage the tech needs of the next decade’s enterprise market.  Just look at the most recent set of company earnings.  On Thursday Amazon Web Services (AWS) reported very strong cloud service numbers.  The platform powers high-profile services for Netflix, Airbnb and NASA.  (Amazon chief executive Jeffrey Bezos is owner of the Washington Post.)

The firm reported $687 million in operating income on $2.4 billion in revenue for AWS, making it a comparatively more profitable venture than the retail arm of the firm.  CFO Brian Olsavsky said that AWS revenue for the year was on track to be “just short” of $10 billion by the end of its fourth quarter.

Then there’s cloud computing rival Microsoft.  The company reported much progress with Azure, and AWS rival.  Azure is Microsoft’s cloud computing business designed to handle modern mobile and cloud-based business needs.  While Microsoft didn’t give specifics, it reported that Azure had grown 140% in the past year.  Is cloud services overall, brought in $6.3 billion in revenue in the fourth quarter, a 5% improvement over the same period last year.

One advantage Microsoft will leverage is its long-running relationships with the business community, building on decades of trust to move into the next era.  The company has already signed on major customers such as GE Healthcare and NBC News Digital in the past to manage some of its online programs; it would make sense to expand relationships with those customers already familiar with the way Microsoft does business as it introduces new products.

Finally, it’s of course worth mentioning that this is more than a two-horse race.  Even among the most influential tech titans, Microsoft and Amazon are not alone:  Google is also gunning for a piece of the pie, as are firms such as IBM and Oracle, both as a way to court businesses and to get a hand in managing and running all the new connected devices that consumers will pick up in the next few years.

In the latest earnings call for Google’s new parent company, Alphabet, executives were eager to talk about its growing efforts in the space as one of its most important emerging businesses.

While Google also doesn’t give specifics on revenue for its cloud business, Google chief executive Sundar Pichai took a moment to highlight the company’s attention to the area.  Pichai said that having run Google’s own services for so long gives the company the experience to handle other businesses’ operations.  And he named cloud as being as important for the firm’s future as a focus on digital media, mobile, virtual reality and the expansion of the availability of Internet service.

“Public cloud services are a natural place for us, so we established a business unit late last year to take full advantage of the opportunity,” he said.  “As you know, Google pioneered the cloud at scale …And we are now able to bring this to bear just as the movement to the cloud has reached a tipping point.”

Read Article (Hayley Tsukayama | washingtonpost.com | 02/02/2016)

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