Cloud partner ecosystem key as AWS, Microsoft face off in SA

South Africa has become the latest cloud computing battleground between rival US-based tech giants Microsoft and Amazon Web Services (AWS).

The war intensified yesterday when AWS announced the opening of its first data centre operations in Africa – the AWS Africa (Cape Town) Region.

With this launch, AWS now spans 73 Availability Zones within 23 geographic regions around the world, and has announced plans for 12 more Availability Zones across four more AWS Regions in Indonesia, Italy, Japan and Spain.

Microsoft had a head start in March last year, when the company launched two data centre regions in SA, becoming the first global provider to deliver cloud services from data centres on the African continent.

AWS and Microsoft are among the richest companies in the world and the local IT industry will be intently watching how they compete in SA.

With only a few details separating the two, local ICT analysts believe the channel will be the biggest differentiator in winning market share.

“The partner ecosystem is key to win market share,” says Clinton Jacobs, senior IT analyst at BMIT. “Training and certification of partners is also very important. The cloud service functionality available locally will also make a difference.”

Jacobs says many of the large cloud computing players have committed to establishing clouds in SA, so there will be increased competition, including from local providers such as Telkom/BCX and Dimension Data.

“South African cloud users will have a variety of choices and be able to select the best cloud for their use case. Any objections regarding latency and data domicile will be removed,” he says.

Similarly, Derrick Chikanga, senior analyst of IT services at Africa Analysis, believes both companies can increase their market share by working closely with local cloud resellers that are in close contact with end-users.

“These resellers have a better understanding of end-user needs. Hence, by expanding their partnership network, both companies can increase their market reach and resultantly their market share. AWS and Microsoft can also better engage enterprises and advise them on the benefits of migrating to the cloud. Some enterprises still have concerns around the level of security inherent in cloud services,” he says.

Jon Tullett, senior research manager for cloud/IT services at IDC, comments: “It’s all about the networks – partners, integrators, network providers, developers, application vendors, consultants – the whole stack.

“Having a very strong partner network is going to be key. Also reference sites – being able to namedrop a big bank or two makes a big difference when you’re pitching to a comparable-size business,” says Tullett.

“We now have multiple hyperscale providers operating full data centre stacks in-country – that’s a very large investment and they wouldn’t be making it if they didn’t expect a return. That aligns with IDC’s forecasts – the local cloud market is growing very strongly.”

Analysing the differences between AWS and Microsoft, Tullett says AWS has a very strong background in infrastructure-as-a-service (IaaS) and later platform-as-a-service (PaaS).

“That shows in the AWS portfolio, and its proliferation of services on top of that makes for a very distinctive strategy,” he notes.

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“Microsoft has a huge installed base of productivity applications in Office 365, but in the areas where it competes directly with other hyperscalers, it’s taking a much more open approach, trying to woo developers, system admins, and third-party software vendors.”

On the other hand, Chikanga points out the key differences lie in their pricing structure and service offerings.

“Broadly speaking, AWS offers ‘on-demand’ pricing models while Microsoft Azure offers ‘pay-as-you-go’ models.”

However, Chikanga says the benefits and discounts offered to each customer depend on the enterprise-specific needs and the volume of work files to be migrated to the cloud.

He adds that each cloud provider offers “always free” services and “valid for a year” services, noting the composition of these two service components vary according to the cloud provider.

For Jacobs, Microsoft has a variety of clouds such as Microsoft 365, Dynamics and Azure with platform and productivity software-as-a-service (SaaS) solutions.

“Many organisations already have large investments in the Microsoft ecosystem like Active Directory which makes transition into the cloud easier.”

According to Jacobs, AWS is the global leader in IaaS as it has a wide variety of services in that space as well as the DevOps environment.

With South Africans now spoilt for choice in regards to cloud services, the analysts say companies need to select cloud providers based on their organisational requirements.

Says Chikanga: “To date, most major companies have adopted a multi-cloud strategy, where they select multiple cloud providers, with each handling specific workloads.

“However, various factors can be considered prior to selecting a cloud provider and these include the pricing structure and the applicable discounts; the level of flexibility provided by the cloud provider; the ability of the enterprise to scale at short notice; the availability level of the cloud services; the level of support from the cloud provider; and the regulatory compliance by the cloud provider,” he says.

“Start with the assumption that you’re going to choose more than one cloud provider, later if not sooner,” Tullett urges. “Then look for the best fit for a specific strategic need. Not a tech need – have a roadmap in mind. If it’s too confusing, bring on a broker or consultant to map it out.

“In many cases, basic cloud services are very similar from one provider to the next. If that’s what you need, just pick whichever you’re most comfortable with, but keep the longer-term view in mind.”

Jacobs believes local users will have to first make sure the cloud service they require for their use case is available on the cloud provider’s platform.

“It may be that the cloud service required is not yet available locally, but may be in another region. Most will eventually be available. Another important factor to consider is the partner ecosystem of cloud providers locally as users may require implementation assistance and support.”