Over the last few years, there has been a continuing trend among companies to move a lot of their data and computing jobs to the public cloud – more specifically to Amazon Web Services (AWS) – instead of having them on their own servers. It has proven to be a popular business model, and is one that Google wants a large piece of, with its own cloud platform. There is a good reason for this: Amazon’s cloud computing division is poised to earn more than $10 billion this year.

However, the public cloud has one main drawback: It does not cater to the many businesses that wish to run only a part of their software in the cloud, while keeping the rest of their data on their own servers. In theory, this is what is known as a hybrid cloud infrastructure which is a mix of public cloud computing and private data centers.

The reason this is important is because there are many companies whose IT executives want to maintain full control of key pieces of data.

Google and Amazon Moving to Develop Hybrid Cloud Software

Although Microsoft’s Azure cloud computing platform still comes a distant second to the huge, $10 billion a year Amazon Web Services platform, Microsoft maintains a vital edge: It can provide the service to its huge pool of large enterprise clients.

The key to this is the company’s Windows Server business, which allows its customers to take their existing investment in data centers and bridges them seamlessly to Azure. This gives them access to virtually unlimited supercomputing power by simply keying in their credit card number.

Now, Amazon, as well as third placed Google Cloud Platform, are looking to develop their own platforms that run on companies’ existing data centers, looking to woo bigger enterprise customers.


A Change in Tactic from Google

This move marks a major shift away from the public cloud computing that has built Amazon and Google’s businesses. It is an acknowledgement that there are a significant number of customers who want to keep part of their IT resources on their premises. Due to regulatory concerns and data governance issues, there are certain customers that simply will not allow key information and business processes outside of their data centers.

For Google, the move does not come as a huge shock. In July 2015, the company teamed up with OpenStack in a bid to develop a free and open source platform to rival Amazon Web Services and which would run within corporate data centers.

Since this time, Google’s collaboration with Openstack’s startup Mirantis has looked to improve on the technology. Google’s new head of cloud computing, Diane Green, made it clear that the firm will do whatever it has to in order to remain competitive.

Amazon Counting On the Public Cloud

On the other hand, the move is a big deal for Amazon. As recently as last year, the company’s CTO Werner Vogels has said that Amazon sees the hybrid cloud model as a passing, short-term trend and expects more companies to continue to outsource their computing resources to AWS.

Although Amazon Web Services provides some products that enable hybrid cloud computing, such as its AWS Storage Gateway, most of the company’s focus has been on making it easier for users to move their data into the cloud instead of developing software to help users manage it themselves.

For this reason, if Amazon has actually tasked its engineers with developing on-premises platforms, it means the company is starting to take this segment of the market seriously. This is hardly surprising, as Microsoft continues to develop both its software and marketing strategy in a bid to close down the revenue gap between itself and Amazon Web Services.

Microsoft Leading the Way with On-Premises Cloud Computing

If Google and Amazon are able to execute their moves quickly and well, they could really hurt Microsoft, whose software is already a mainstay of corporate data centers and which has long promoted its own vision of hybrid infrastructure. The company’s major ambition is to have its customers put some of their resources in the Microsoft Azure cloud, while retaining some within their existing data centers.

Microsoft has something of an advantage in this case over Amazon and Google because there are already many companies around the world that have Windows Server software installed on their hardware, thus giving it a significant foothold within existing shops. Microsoft is also working on accelerating the hybrid cloud strategy, with plans to launch Azure Stack in 2017. This will let its customers install a virtual copy of the Azure cloud on certain servers, making integration of the two much simpler.



Up until about a year ago, Amazon Web Services and Google executives had seemed to downplay the importance of on-site data centers, but this is slowly starting to change. The companies have come to the realization that it is impossible for every gigabyte of data or piece of software to live within the cloud.