Inside Google and Microsoft's efforts to catch Amazon in the cloud computing services space
Alex Konrad / Forbes : Thanks: @thealexknapp
Context & Ripple Effects
This Forbes deep dive lands a year after AWS revenue confirmed Amazon's grip on cloud computing with Microsoft and Google officially cast as chasers. The piece matters because it documents the chase as a strategy problem, not just a revenue-gap story: AWS had a multi-year head start in enterprise mindshare that neither rival could buy back with infrastructure alone.
The subsequent coverage shows how the playbook evolved from catch-up spending to structural pressure — partnerships, hardball licensing, and tailored offerings for deskless workers by 2019, then cloud deals bundled with go-to-market help for startups in 2020.
First-order effects
- Enterprise buyers evaluating cloud contracts gain two credible counterweights to AWS, giving them negotiating leverage on pricing and terms they lacked when Amazon was the default.
- Google and Microsoft must commit sales, engineering, and capital ahead of proven demand to close a gap measured in years of AWS head start.
Second-order effects
- Competition shifts from raw infrastructure scale to bundling: Microsoft leans on its enterprise software relationships while Google courts developers and startups, forcing AWS to defend accounts it once won on inertia.
- As discounts and tailored offerings erode list prices, the rivals' margins become the pressure point — pushing both toward higher-margin attach plays around their existing software estates.
Third-order effects
- If the pattern holds, hyperscale cloud settles into a durable three-player oligopoly where switching costs and bundled licensing, not commodity compute price, decide share — a structure later visible when [[a:981215|Microsoft recruited Google and Oracle to lobby Washington to spread US government cloud spending beyond AWS]].
- Regulators and large public buyers become the swing constituency: whoever convinces governments that concentration in cloud is a procurement problem shapes the market more than any single product launch.
The trend: Cloud computing is consolidating into a three-horse race decided less by infrastructure scale than by bundling, licensing leverage, and government relationships.