Last year software maker K2.com stopped relying on Amazon.com (AMZN) for its cloud services and turned to Microsoft (MSFT) instead. K2 Chief Executive Officer Adriaan van Wyk says he’s happy with the choice—most of the time. The developer tools of Microsoft’s Azure cloud service are superior, he says, and he likes its personalized customer service. Yet occasionally Azure is slow, and on Nov. 18 it suffered a global outage that lasted several hours. As insurance, Van Wyk has moved 5 percent of his business back to Amazon Web Services. “We still like Microsoft,” he says. “At the same time, it’s been a bit bumpy. The 5 percent makes sure if we have to move back to AWS we can do it quickly.”
Van Wyk’s divided loyalties underscore the challenges Microsoft faces as it tries to wrest market share from industry leader and crosstown competitor Amazon. Venture capitalist John Connors has dubbed the rivalry “The Battle in Seattle.” Synergy Research Group puts Amazon’s share of the $14.5 billion worldwide market for cloud infrastructure services at 27 percent as of this year’s third quarter, down slightly from 28 percent the year before, while Azure’s has climbed three percentage points to 10 percent. “It’s clearly a two-horse race now, whereas two years ago it was probably more of a one-horse race,” says Scott Guthrie, who leads Microsoft’s cloud and enterprise division.
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