Home tech Amazon, Microsoft tightens Grip on Enterprise Tech

Amazon, Microsoft tightens Grip on Enterprise Tech

Amazon.com
Inc.

is

Microsoft
Corp.

it seems that it is tightening its grip on the corporate IT market, thanks to an advantage of cloud computing and the consolidation of the current sector, according to market research firm ETR.

Amazon and Microsoft have been cited as the preferred providers in more than half of the top 30 products and services listed as information technology spending intentions by more than 800 key information officers and other high-level corporate decision makers, according to the results of the survey collected by the beginning of March.

Products and services include basic IT needs, such as cloud infrastructure and software, data analysis, robotic process automation, artificial intelligence and other emerging digital tools .

Most survey participants come from large global companies in a range of industries, US federal agencies and private companies with over 1,200 employees, according to the ETR report.

Thomas DelVecchio, founder and CEO of the parent company ETR Aptiviti Inc., said the results show that both Amazon and Microsoft benefited from an advantage in the cloud market.

Amazon and Microsoft are currently the two largest providers of public cloud services, generating nearly $ 50 billion a year in combined revenue, a figure that is expected to double by the end of 2020.

"But it's not just that AWS and Azure have managed to make the cloud faster," said DelVecchio, referring to the cloud drives of Amazon and Microsoft respectively. "Furthermore, they have been constantly expanded and offered more and more, so that users could find everything they need right there," he added.

He compares the growing appeal for CIOs to the shops of the Stop & Shop: "Go to a place and you have your butcher, your baker and other goods. Why go back to your grocer?"

Not everyone is buying the one-stop shop strategy.

Marty Boos, CIO of ticket dealer StubHub, owned by

EBay
Inc.,

he said he is concerned that buying more IT products and services from the same vendor could lead to the lock-in of the supplier.

"I don't want to work with a hundred sellers, but I feel comfortable with 10-15 people who can help us innovate and solve business problems," Boos told CIO Journal.

Amazon spent more than $ 13.6 billion on technology last year, making it the world's largest IT spender, much of its use in servers and other data center infrastructures aimed at building cloud services to sell to corporate customers. according to International Data Corp Amazon declined to comment.

Microsoft, the fifth largest spender, has invested $ 9.2 billion in corporate IT last year, IDC said. Microsoft did not answer calls for comments.

Competition among all corporate IT suppliers is fueling a resumption of mergers and acquisitions in the sector. Last year the value and volume of mergers and acquisitions in the global software and business sector peaked at five years, along with steady growth in the IT and commercial services sector, according to acquisition consultancy Hampleton Partners.

Among them, Amazon and Microsoft have closed dozens of billion-dollar mergers and acquisitions in 2018, ranging from Amazon's purchase of video bell producer Ring to the acquisition of DataSense by Microsoft, a data management platform for online training services.

This type of industry consolidation is likely to continue in the coming years, especially if the economy weakens, said David Mitchell Smith, vice president and distinguished analyst at

Gartner
Inc.

While CIOs often say they prefer to shop around for the best IT products and services, Mr. Smith said that "they don't always act that way," adding that it's much easier to get as many tools as possible in the same place.

Write to Angus Loten on angus.loten@wsj.com

.

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