It is easy to rent access to computers for a monthly fees rather than buying them and maintaining them for a lifetime. Cloud has proved to be a profitable business for Microsoft, Amazon and Alphabet as large enterprises shift to Internet-based services to host and manage their data. (Alphabet – parent company of Google). These 3 companies excelled their profit estimates for the last quarter with major contribution coming from cloud computing services they offer. On the contrary, technology companies like IBM, HP, EMC (will be merging with DELL) etc. are seeing a downtrend with decline in sales of their traditional hardware, software because of the cloud providers. Google, Amazon and Microsoft provide their computing services to many companies who are eagerly seeking for low cost alternatives. Otherwise those companies would have gone for traditional hardware, software from HP, IBM.
While many firms try providing cloud services in the market, winning in cloud is not for everyone! Amazon, Microsoft and Google invest significant sums to build huge, so called state-of-the-art data centres. “Developing a data centre infrastructure along with the required marketing and operations support is simply beyond the reach of all, but to the companies like Amazon, Google, Microsoft” says chief analyst John Dinsdale from Synergy Research Group.
Many of the Indian IT companies like TCS, Infosys, Wipro are already focusing in the digital and Cloud computing services partnering with companies like Microsoft. Indian IT companies are seeing a reduction in larger deals from customers who traditionally rolled out tenders of hundreds of millions of dollars, but they are many transactions from customers in lower value deals linking with Cloud and digital. Like Google’s CEO Sundar Pichai said “Every business in the world is going to run on cloud eventually” let us see how it rains dollars!
Please refer to Bloomberg, The Walls Street Journal, tech.firstpost.com, Forbes for more details.