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1 The rivalry between Amazon Web Services, Microsoft Azure, and Google Platform, and how multi-cloud strategies are transforming the industry. Cloud Wars 2 The presentation will also be sent to you. Feel free to share with colleagues. The resolution of some slides may be suboptimal due to the webinar software. Those slides will look fine in the presentation that we send you. Briefing recording will be distributed http://support.citrixonline.com/en_US/Webinar W I T H I N 2 4 H O U R S 3 @cbinsights @judwaite #cloudwars J O I N T H E C O N V E R S A T I O N O N T W I T T E R 4 W H O W E A R E The technology market intelligence platform. CB Insights software lets you predict, discuss, and communicate emerging technology trends using data in ways that are beyond human cognition. We are a leader in the Expert Automation & Augmentation Software (EAAS) space. 5 T R U S T E D B Y T H E W O R L D ' S L E A D I N G C O M P A N I E S "We use CB Insights to find emerging trends and interesting companies that might signal a shift in technology or require us to reallocate resources." Beti Cung, Corporate Strategy, Microsoft Experience-based Insights from Peer Executives Let our executive peer network help inform solutions to your company's most complex growth challenges. If you are a C-level, EVP or SVP level executive at a company doing $1B+ in revenue, request an invite by emailing community@cbinsights.com. LEARN MORE 7 Jud Waite Jud Waite is an intelligence analyst at CB Insights, where he produces data- driven analysis and research reports on private company financings, exits, and performance trends across emerging industries, geographies and investors. His research has been cited in Business Insider, CNBC, Bloomberg, CNBC, and the Financial Times. Prior to joining the research team at CB Insights, Jud was an early member of CB Insights' Customer Success team where he specialized in working with venture investors. Jud is a graduate of Lafayette College. Popular research by Jud: What Is 5G? Understanding The Next-Gen Wireless System Set To Enable Our Connected Future Rich Communication Services (RCS): The Next-Gen Messaging Tech Reinventing Brand Communications @judwaite | jwaite@cbinsights.com Senior Intelligence Analyst A B O U T T H E A N A L Y S T 8 Contents 9 17 39 49 56 A Brief History of Cloud Computing The Emergence of Cloud Wars The Dominance of AWS The Enterprise Expertise of Azure The Long Game of GCP The Rise of Multi-Cloud Strategies Shifting Power Dynamics Questions? 9 C L O U D W A R S A Brief History of Cloud Computing 10 The rapid expansion of internetworking John McCarthy starts work on the first time-sharing project J.C.R Licklider presents the idea of an Intergalactic Network First messages sent on the ARPANET Time-sharing solutions become commercially available ARPANET expands with the addition of CSNET 1959 1963 1969 1970s 1981 The internet becomes global and the term "cloud computing" is first used 1990s 1969 1973 1970 11 CSNET connects to ARPANET in 1981 CSNET as of June 1st, 1983 12 The internet becomes global in the 1990s Source: Brian Reid; Global aggregate news flow on May 13th, 1993 13 Compaq uses the term 'cloud' first in 1996 Source: https://s3.amazonaws.com/files.technologyreview.com/p/pub/legacy/compaq_cst_1996_0.pdf 14 "What's interesting [now] is that there is an emergent new model. I don't think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing they should be in a 'cloud' somewhere." August 2006 Eric Schmidt Former CEO of Google G O O G L E R E C O G N I Z E S T H E P O T E N T I A L O F T H E C L O U D 15 AWS had already established its cloud platform Amazon Web Services Solutions Catalog, August 2006 2003 Source: https://archive.org/web 2004 2006 2016 AWS introduces Simple Queue Service (SQS) AWS re-launches with delivery of S3 and EC2 Andy Jassy promoted to CEO of AWS Andy Jassy founds AWS with team of 57 16 "Amazon S3 is based on the idea that quality Internet-based storage should be taken for granted. It helps free developers from worrying about where they are going to store data, whether it will be safe and secure, if it will be available when they need it, the costs associated with server maintenance, or whether they have enough storage available. Amazon S3 enables developers to focus on innovating with data, rather than figuring out how to store it." March 2006 Andy Jassy CEO of AWS C L O U D C O M P U T I N G R E M O V E S B A R R I E R S T O E N T R Y 17 C L O U D W A R S The Emergence of Cloud Wars 18 Microsoft and Google follow Amazon's lead AWS re- launches with SQS, S3, and EC2 Google releases Google App Engine Microsoft launches Windows Azure Google launches Google Cloud Storage Google launches Google Compute Engine 2006 2008 2010 2010 2013 Windows Azure renames to Microsoft Azure 2014 2006 2010 2013 > > 19 C L O U D W A R S The Dominance of Amazon Web Services 20 The virtuous cycle of cloud computing Source: https://cloudblogs.microsoft.com/ Lower prices attract more customers More customers utilize more resources Greater utilization of resources requires more infrastructure Buying more infrastructure in volume leads to lower unit costs Lower unit costs allow for lower customer prices 21 AWS offers ~140 services across 19 categories Source: https://aws.amazon.com/products/ 22 AWS maintains a third of cloud market share Source: Synergy Research; IaaS & PaaS Markets 13% 48% 6% 33% Azure GCP Others AWS 23 AWS is the 5th largest enterprise tech company Source: SEC.gov; Annual revenue in billions, Q1 2017 Q4 2017 $102.3 $79.1 $38.9 $26.5 $17.5 Microsoft IBM Oracle SAP AWS 24 "There won't be just one successful player. There won't be 30 because scale really matters here in regards to cost structure, as well as the breadth of services, but there are going to be multiple successful players, and who those are I think is still to be written. But I would expect several of the older guard players to have businesses here as they have large installed enterprise customer bases and a large sales force and things of that sort." Andy Jassy CEO of AWS A W S A C K N O W L E D G E S G R O W I N G C O M P E T I T I O N 25 C L O U D W A R S The Enterprise Expertise of Microsoft Azure 26 Hybrid-cloud remains a priority for businesses Source: https://cloudblogs.microsoft.com/ Old IT New IT Reality Implementation Workload Placement Physical Servers and Virtual Machines On-Premise, Non-Cloud Hybrid Cloud Off-Premise, Public Cloud On-Premise, Private Cloud SaaS: Office 365 PaaS: Azure IaaS: Azure Optimized for large, unique, and/or sensitive workloads 27 VMs are often less expensive on Azure Source: https://www.parkmycloud.com/cloud-pricing-comparison/ Type Virtual CPUs Memory AWS Azure GCP General Purpose 2 8GB $0.0928 $0.0850 $0.1070 4 16GB $0.1856 $0.1700 $0.2140 8 32GB $0.3712 $0.3390 $0.4280 Compute Optimized 2 4GB $0.0850 $0.0850 $0.0813 4 8GB $0.1700 $0.1690 $0.1626 8 16GB $0.3400 $0.3380 $0.3253 Memory Optimized 2 16GB $0.1330 $0.1330 $0.1348 4 32GB $0.2660 $0.2660 $0.2696 8 64GB $0.5320 $0.5320 $0.5393 28 "In Azure, we bill all virtual machines (VMs) running Linux and Windows on a per-minute basis, rounded down to the nearest minute. We only charge for the full minutes you use. This saves you money and simplifies your bill. In addition, Azure led the industry with a new service called Azure Container Instances (ACIs) that realizes the true value of a per-second billing model. ACI offers containers that start in seconds and are billed per-second without any infrastructure management." October 2017 Arpan Shah General Manager at Azure P R I C I N G S I M P L I C I T Y W I T H A Z U R E 29 Azure has data centers in more regions globally Source: Respective Cloud Websites 19 44 17 4 10 3 AWS Azure GCP Current Regions Upcoming Regions 30 Azure breaks ground in South Africa and UAE Source: https://azure.microsoft.com/en-us/global-infrastructure/regions/ 31 C L O U D W A R S The Long Game of Google Cloud Platform 32 GCP known for its content delivery network Source: https://cloud.google.com/about/locations/ 33 Google continues to invest in subsea cables Source: https://www.blog.google/products/google-cloud/expanding-our-global-infrastructure-new-regions-and-subsea-cables/ 34 Following AWS, Google Compute Engine also moves to per-second billing September 26th, 2017 migrates from to 35 Google backs more open source projects Source: https://opensource.google.com/projects/ 36 GCP bets on machine learning at the edge Source: https://cloud.google.com/edge-tpu/ Edge TPU Cloud IoT Core 37 GCP ranks higher in customer satisfaction Source: https://www.gartner.com/reviews/market/public-cloud-iaas 4.4 4.1 4.5 AWS Azure GCP 38 "We're playing the long game. This thing is early. Some people estimate that only 10 percent of workloads are in the big public clouds. And if it's not in a public cloud, it is going to be in a public cloud." July 2018 Diane Greene CEO of Google Cloud G C P P L A Y S T H E L O N G G A M E 39 C L O U D W A R S The Rise of Multi-Cloud Strategies 40 "We've been able to moderate user cost growth through the successful execution of our multi-cloud strategy. Specifically, hosting costs per user dropped from $0.72 a year ago to $0.70 in the quarter. That's great progress in a year when our sales have more than doubled and engagement metrics have grown substantially." February 2018 Drew Vallero Former CFO of Snap S N A P F I N D S S U C C E S S W I T H I T S M U L T I - C L O U D S T R A T E G Y 41 Multi-cloud discussed more on earnings calls Quarterly mentions of 'multi-cloud' or 'multi cloud' on earnings calls, Q4 2013 Q2 2018 / Represents the quarter in which the earnings call took place 42 Containers facilitate multi-cloud adoption Containers offer developers and system admins the ability to segment applications into microservices. Containers are lightweight, which makes them less resource intensive and portable across cloud platforms. 43 GCP offers open source containerization tools July 2015 May 2017 July 2018 > > Kubernetes v1.0 Istio v0.1 Knative Istio is an open-source framework for connecting, managing, and securing microservices across heterogeneous clouds, platforms, and vendors. Knative is an open source software layer that helps developers and system admins deliver serverless functions to developers on any cloud. Kubernetes manages containerized applications across multiple hosts, providing basic mechanisms for deployment, maintenance, and scaling of applications. 44 "8 out of 10 enterprises today have a multi-cloud strategy The move to software containers has helped in simplifying and speeding up how we package and deliver software And as Sundar mentioned, 4 years ago we released Kubernetes today it's by far the most popular way to run and manage containers." October 2017 Urs Hlzle SVP at Google Cloud G C P A C K N O W L E D G E S M U L T I - C L O U D A D O P T I O N 45 The private market multi-cloud ecosystem Private companies that raised equity financing between 6/24/2016 6/24/2018 46 Docker is a provider of containerization products and services. Developers and system admins use Docker to build, ship, and run distributed applications on-prem or in the cloud. C L O U D W A R S Funding $240 Million Valuation $1.3 Billion Backed by: 47 "With an estimated 85 percent of today's enterprise IT organizations employing a multi- cloud strategy, it has become more critical that customers have a 'single pane of glass' for managing their entire application portfolio. [Docker] delivers on the promise of the cloud by offering customers the portability benefits of containerized applications and the portable management of those containerized applications across all infrastructure." June 2018 Scott Johnston CPO of Docker D O C K E R C O N T A I N E R S A R E P O R T A B L E A C R O S S C L O U D S 48 Docker is the most used container tool today Respondents of RightScale's State of the Cloud Report from 2015 2018 13% 27% 35% 49% 2015 2016 2017 2018 49 C L O U D W A R S Shifting Power Dynamics 50 Amazon creates a conflict of interest for AWS Diane Greene announced a major win over Amazon: Target is using Google's cloud July 24th, 2018 Microsoft and Walmart team up to take on Amazon July 17th, 2018 51 Azure and GCP acquire more cloud companies Quarterly mentions of 'multi-cloud' or 'multi cloud' on earnings calls, Q4 2013 Q2 2018 / Represents the quarter in which the earnings call took place 2018 Acquisitions 2017 Acquisitions 2016 Acquisitions 2015 Acquisitions 2014 Acquisitions 2013 Acquisitions 3 1 1 6 6 3 6 4 2 1 6 5 3 4 1 5 3 0 5 10 15 20 25 AWS Azure GCP 52 GitHub is a version control and source code manager for more than 28M developers worldwide. The company boasts 57M+ repositories and $100M+ in annual recurring revenue from enterprise customers. C L O U D W A R S Funding $350 Million Valuation $7.5 Billion Acquired by: 53 Azure applies for more cloud patents than AWS Total patent applications including "cloud" by application date, 2013 2018 YTD (7/20/2018) Amazon Microsoft Google 54 Azure and GCP growth is ~2X that of AWS Source: Canalys; Estimated IaaS growth year-over-year, 2016 2017 45% 98% 85% AWS Azure GCP 55 56 Questions? Twitter: @judwaite jwaite@cbinsights.com 57 Collections Market landscapes that highlight emerging players, incumbents, and more in new technology areas Market Map Visually compelling industry market landscapes Augment this briefing with the CBI platform Not a customer? Get access today. D I G G I N G D E E P E R This briefing contains links to the underlying data, trends, research on the CB Insights machine intelligence platform. These links are described below. Advanced Search Drill into the underlying data for a particular point Trends What's happing, who is being mentioned, company comparisons, and more Reports Visualizations providing insight into markets you care about Profile Take a deep dive into a specific company, their performance, who invested in who, and more 58 The CB Insights platform has the underlying data included in this report W H E R E I S A L L T H I S D A T A F R O M ? CLICK HERE TO SIGN UP FOR FREE 59 cbinsights.com @cbinsights Jud Waite Senior Analyst, TMT jwaite@cbinsights.com @judwaite
