How much do corporations spend on promoting their cloud products?

Major players in the cloud services market are trying to occupy a dominant position. At the same time, such companies spend billions of dollars a year to expand the capacity of their data centers in order to maintain the performance of their own services at a high level. At the same time, the budget of such projects increases from year to year.

Best of all, this trend can be seen in the example of Amazon with their Amazon Web Services. Everything is good here both in terms of costs and in terms of income received. So, in 2015, revenue for the first quarter amounted to about $ 1.57 billion. This is 50% more than the same period of time last year. Net income - $ 265 million. The company's revenue for the year shown in the first quarter of 2015 amounted to $ 5.16 billion.

At the same time, AWS increases profitability, so $ 5 billion is not the limit. However, AWS requires constant costs for the purchase of additional equipment, upgrading the infrastructure of data centers and other cost items. At the end of 2014, the cost of equipment, buildings and structures, the land on which AWS DCs are located, was $ 7 billion. The year before, the cost of all this was only $ 3.8 billion.
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Not Amazon th one

Amazon competitors in cloud services spend a little less. The annual costs of corporations like Microsoft and Google for their cloud services are billions of US dollars. The corporation of goodness spends not much less on its cloud infrastructure than its competitors.

Google

For example, Google’s capital expenditures in the first quarter of 2015 alone amounted to about $ 2.93 billion. Here, mainly, equipment costs, the creation of data centers and other facilities. According to representatives of the corporation, the cost of all these expensive items will only grow.

For example, this month, Google management announced plans to invest another $ 1 billion to expand the capabilities of the data center in Iowa. To this we should add another half billion dollars that have already been invested in this object.

Microsoft

Microsoft is already a direct competitor to Amazon in providing access to cloud services. Unfortunately, the Redmond company does not disclose its costs for its own “clouds”, but it is known that the operating costs for these needs grew by $ 190, or 13%, only in the first quarter of this year compared to the similar expenses of the first quarter of last year. The company spends money mainly on increasing the productivity of its business centers and expanding their capabilities.

Previously, Microsoft announced its intention to invest even more in building data centers and expanding the infrastructure. Only one of the recently announced DCs cost the company $ 1.1 billion, by the way, the data center was also built in Iowa. And another $ 1 billion will be invested in a data center from Ireland.

According to some analysts, the increase in costs is due to the fact that companies are competing with each other, seeking to reduce the prices of their services and improve the quality of service, thereby attracting customers.

Thus, over the past 10 years, the cost of AWS services has decreased by 48 times.

Revenues of companies are also increasing, while it’s good to compete with companies already named and IBM corporations:



The interest of companies in the cloud segment of the telecommunications services market is understandable: clouds are increasingly in demand, and according to the analytical company Statista, the total volume of this market by 2016 will grow to $ 24.22 billion.

Yellow jersey

It still owns Amazon with its AWS. Last year, the company's cloud service capacity was about 5 times higher than the services capacity of the company's 14 closest competitors. The cost of the company's equipment, used to provide AWS services, is already about a third of the value of the company's assets.

As far as you can understand, Amazon is not going to give up its first place, and in the future the company will spend billions and billions, and competitors will catch up with the leader.

The market is warming up, the race of giants continues. The main thing is that as a result of such active competition, consumers only win.