Race Towards Cloud

Top In The Cloud 

In putting together this year’s list of top 10 cloud computing service providers, we can certainly apply the age-old proverb: The more things change, the more they stay the same. There has been a lot of change in the cloud computing arena since last year’s top 10 list. The raft of new technologies delivered over the past year or two has enticed many larger IT shops to launch their first private, hybrid and public clouds and served to make or break the fortunes of small and large cloud competitors alike. What remains the same is that big fish get bigger and small fish get smaller -- or are eaten. A few sharks -- known to us as telecommunications companies -- have seen the opportunity to enter the tank and gobble up hot cloud services vendors. We know lists such as this invite healthy debate among readers as to who and, perhaps more importantly, who isn’t named. So be sure to let us know what you think.

 

1.Amazon Web Services 

For the third year in a row, Amazon Web Services (AWS) tops our list, and not just by dint of remaining the dominant player in public cloud computing worldwide. Over the past year, AWS has been on a roll shipping a rich variety of new services targeting enterprise IT, a market that has proved hard to penetrate for public cloud providers but promises great returns for those that do. Additionally, in a strategy to drive the market to follow its moves, AWS has cut prices 19 times in just the past six years. Although Amazon.com doesn't fully break out its cloud services revenues, AWS would appear to be a $6 billion company based on its performance in 2011. That's in comparison to Amazon.com's overall revenues of $48 billion for the year -- not bad for a business reputedly created to sell the e-retailer's excess compute capacity back in 2002.

 

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2. Rackspace

Rackspace Inc. may be this year's sleeping giant. Although it hasn't made any billion-dollar acquisitions the way several competitors have in 2012, the co-creator of the OpenStack open source cloud OS is positioned to remain a leader on the cloud provider rolls. In fact, the OpenStack community just shipped its fifth release, code-named Essex, in early April. Rackspace, which started out as a custom applications hosting company in 1998, provides traditionally managed hosting as well as public cloud Platform as a Service (PaaS), and hybrid cloud services that blend the two technologies. The company grossed almost $1.3 billion in fiscal 2011, up from $629 million in 2009, pushing growth well into double digits annually with about a fifth of that coming from its cloud businesses last year. The company began the year with 4,040 employees -- who are referred to as "rackers" -- more than 170,000 customers and nearly 80,000 servers in more than 233,000 square feet of data center space worldwide.

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 3. CenturyLink/Savvis

One of three telcos to make this year’s list, CenturyLink demonstrated how serious it is about becoming a top-tier cloud services player when it snapped up Savvis Inc. in a deal valued at just under $2.7 billion last year.

At least on paper, the merging of CenturyLink’s hosting, networking and other infrastructure assets, married with Savvis’ collection of cloud products, colocation and managed hosting cloud services, figures to make the company a formidable competitor going forward. The two companies now have a network of 48 international data centers with nearly 2 million square feet of floor space. Another asset Savvis will appreciate is CenturyLink’s deep pockets: CenturyLink completed its acquisition of Qwest Communications last year, a deal worth $10.6 billion. The combined company has revenues of $18.7 billion with earnings of $8.1 billion. This should be enough walking around money to compete against big, cash-rich telcos such as Verizon/Terremark and high-tech monsters like EMC, HP, IBM and Microsoft.

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