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Think Cloud Computing is not big business...think again

By Steve Simmerman | 02/05/2013 | 12:03 PM

A very interesting story about the battle for cloud computing market dominance came out today. The battle is on, and Google, Microsoft and Amazon are really slugging it out.  Pretty astonishing numbers at play as well.  Research firm IDC was guoted in the story saying that estimates for ' "public cloud" services are among the fastest-growing areas of information technology, with a total market size of $40 billion last year.'  That's right 40, as in BILLION, 40 BILLION!

The battle is a nasty one involving pricing wars, poaching employees (leading to lawsuits) and more.  On the pricing front, Amazon has cut prices 25 times on it's AWS (Amazon Web Services)!  The story goes on to say that these companies "companies immediately began battling in pricing. Within roughly one week last fall, Google announced it was dropping prices on its computing-storage by about 20%, to a starting price of 9.5 cents a month for each gigabyte. Amazon quickly matched Google's lowered starting price, prompting Google to announce a further price cut to a starting monthly price of 8.5 cents per gigabyte. Microsoft followed a few days later by announcing it was slashing Azure costs to similar levels."

The battle for developers and customers in the cloud is on! The economics are certainly worth looking into.  The story goes on to present findings by McKinsey & Co. who "last fall calculated a small computer server would cost a company an average of $31.55 a month to buy and maintain, while a comparable amount of cloud service from AWS or others costs an average of $16.06 a month."

What is your experience with cloud computing and how do you see this battle helping your organization?  We'd love to hear from those of you that have ventured into the cloud.

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About Steve Simmerman

Steve Simmerman

Steve Simmerman is a Senior Director with JDA. Simmerman has more than 25 years of experience in the supply chain industry including software, consulting and material handling. He has focused his efforts on working with clients to achieve high performance supply chain results through partnerships and creative solutions. He is a member of CSCMP, WERC, and MHIA and is a regular contributor to several industry publications and events. Simmerman holds his undergraduate and MBA degrees from The University of Notre Dame.



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