Microsoft Azure is getting smooshed in the cloud computing battle vs Amazon Web Services. And Hewlett-Packard's cloud didn’t even register compared to AWS, leading to HP getting out of the business a month ago (see the chart on the Infrastructure-as-a-Service market from Wikibon here). But HP—or rather, the newly formed HP Enterprise (NYSE: HPE)—has plenty of big customers that still might be looking to get started in the cloud or expand what they’re already doing there.
And so, enter the new arrangement between HP Enterprise and Microsoft Azure (Nasdaq: MSFT), in which the two will act as “preferred customers” of each other—so that HPE is committed to re-selling Azure, and Microsoft will give preference to HP Enterprise when it comes to providing cloud services. In the words of HP Enterprise CEO Meg Whitman, HPE will "serve as a preferred provider of Microsoft infrastructure and services for its hybrid cloud offerings."
HP’s recent disclosure that it would stop pursuing the public cloud paved the way for the deal, and the arrangement now aims to create a more formidable opponent to Amazon Web Services (Nasdaq: AMZN) in the form of the HPE-Microsoft power team. And it could actually work. Not all companies are keen to trust Amazon over an established enterprise tech provider like HP or Microsoft, and some studies of AWS vs. its competitors have suggested Amazon Web Services falls short of Azure and other cloud computing providers on performance.
It could actually work.[/pullquote]
The deal between HPE and Microsoft, thus, is a “smart move,” writes Serdar Yegulalp for InfoWorld. “Customers will respond better to two trusted names delivering things they're known well for (HPE for hardware, Microsoft for software) instead of just one name attempting to leapfrog into new territory.”
As I’ve noted previously, Microsoft Azure saw revenue of $400 million for the quarter ended June 30. AWS generated more than 4X that revenue—or $1.82 billion—in the same quarter.
Microsoft didn’t give out the most recent quarter's figures (ended in September) but implied there had been a bit of growth over the previous quarter; Amazon Web Services revenue for the recent quarter rose to $2.08 billion.
So there's plenty of catching up to do for Microsoft Azure—only now they won't be fighting AWS alone.
Photo by Tracie Hall, used under Creative Commons (CC BY-SA 2.0).
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