Alphabet Inc. Is Losing The Cloud Battle To Amazon & Microsoft - And May Never Catch Up

(This post is an edited excerpt from the original article.)

original article

…Amazon.com, Inc. (Nasdaq: AMZN) and Microsoft Corporation (Nasdaq: MSFT) already have a big lead ahead of [Google] Alphabet Inc. (Nasdaq: GOOGL), with their cloud platforms. That’s bad news for Google, because switching platforms is often very difficult and costly, so most companies prefer simply to stick with what’s working for the long haul.

…As Recode notes, Amazon and Microsoft are both seeing huge cloud services revenue growth, which makes it continually harder for Google to compete:

One reason for this is that for every customer Amazon gains, that’s a potential addition Google has lost.

Changing from one cloud provider to another is technically extremely difficult, making it a better approach to nab companies as they first buy into cloud services rather than luring them in later.

Amazon’s cloud business grew 43% to $3.7 billion in the first quarter. Microsoft’s Azure gained 93% in the same period.

Even if Alphabet/Google is unable to catch up to its larger rivals in the space, third place may offer plenty of spoils yet.

The cloud market is predicted to reach $383 billion by 2020, so the company might be content with a smaller piece of a much larger pie after all.

Alphabet Inc. shares closed at $924.52 on Friday, up $33.08 (+3.71%). Year-to-date, GOOGL has gained 16.67%, versus a 6.97% rise in the benchmark S&P 500 index during the same period…