Google, Microsoft head for cloud battle with Amazon
The 2 tech giants plan to pitch their cloud infrastructure platforms in direct competition to the e-tailer.
Amazon competes primarily with Microsoft's (MSFT) Azure, Google's (GOOG) App Engine, Salesforce.com (CRM) offerings such as Heroku and Force.com, and Rackspace.
However, Microsoft and Google offer cloud platform-as-a-service offerings, which enable developers to run their apps on their servers, compared to Amazon's cloud infrastructure-as-a-service offering that gives greater control of the entire virtual environment to developers. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
Google and Microsoft are apparently planning to go up against Amazon by launching their cloud infrastructure platforms, which will compete more directly with Amazon's Elastic Computing Cloud. Amazon generates a significant portion of its revenue from Amazon Web Services, and is on track to generate roughly $2 billion from this business in 2012.
We expect Google's and Microsoft's focus on cloud offerings and their efforts to directly compete against Amazon will lead to a decline in Amazon's market share in the space. You can check out the impact of a slowdown in Amazon's revenue from cloud and other Web services on its value using this chart:
Cloud and other Web services account for around 3% of Amazon's total value. We currently have a $222 Trefis price estimate for Amazon, which stands near its market price.
More from Trefis
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.