Microsoft appealed for support on July 27 from Google and Oracle, to help it lobby the US government. The latter currently favors contracts with Amazon to take advantage of its services in the cloud. Upset by this situation of domination, the Redmond firm seeks to encourage a preference for “multicloud”, that is to say the use of the services of several providers.
Amazon Web Services dominates the cloud market
Amazon, through AWS, dominates the cloud infrastructure industry with over 33% market share in 2022, according to a Synergy Research Group report. Microsoft comes in second place with 22% of the shares followed by Google with 10%. This situation of dominance persists in the sale of cloud services to the government. In 2021, Amazon had 47% of the public market share in the United States and Canada, compared to 28% for Microsoft.
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Annoyed, Microsoft reached out to Google and Oracle, along with other industry players like VMware, Dell Technologies and IBM, to set up joint action. the Wall Street Journal had access to the document related to this call, in which Microsoft explains that it wants to push the government to establish a preference for “multicloud”. According to the American company, multicloud would enable the government to optimize its services and better control costs.
Amazon believes that this lobbying move is a selfish action on Microsoft’s part. ” Public sector customers should have the freedom and flexibility to determine how to obtain secure, reliable, and cost-effective cloud services and software from the vendor(s) of their choice, without licensing mandates or restrictions. software “Explained a spokesperson for the e-commerce giant.
Amazon and Microsoft’s rivalry for the public sector
If Microsoft takes a stand so vigorously, it is no coincidence. The cloud accounts for almost half of its economic activity. In the first quarter of 2022, its Intelligent Cloud branch had brought in $19.1 billion, and Azure-related sales were up 40% in the second half compared to 2021. Microsoft is likely frustrated at not seeing progress in its sale of Azure. ‘Azure to the US government, with Amazon getting most of the contracts.
There is a real conflict between Microsoft and Amazon who fought for several years to obtain the JEDI Cloud contract with the Pentagon. This contract valued at 10 billion dollars over ten years was awarded to Microsoft in 2020 before Amazon was finally considered the favorite candidate in 2021. In the end, the Pentagon abandoned the project and favored the use of the multicloud option to avoid dependence on a single provider.
A Microsoft spokeswoman explained that the company ” has always advocated a multicloud approach as a best business practice, and almost every company has adopted it “. Oracle has already expressed support for the move. Company Vice President Ken Glueck said he supports ” wholeheartedly their efforts and we plan to help them in any way we can “. The other actors solicited have yet to give their response, which may help to tip the scales.