Amazon is holding its AWS (Amazon Web Services) re:Invent conference this week, and in a keynote today AWS CEO Andy Jassy took off the gloves and went right after their closest competitor, Microsoft.
In the keynote, according to a report from GeekWire, Jassy called out Microsoft's recent licensing changes, saying that Microsoft wants a "stranglehold" on the market. The changes, announced in August and taking effect on October 1st, 2019, affect companies that want to move existing on-premises licenses for products like Windows Server and Sql Server. Previously, companies could use their existing licenses to move these products to the public cloud, as well as to "traditional outsourcing" providers. With the change, Microsoft specifically calls out Microsoft, Alibaba, Amazon, and Google as "Listed Providers," and excludes companies from transferring licenses to these services (with the exception of Software Assurance, a more expensive form of licensing, or Azure Hybrid Benefit, a loophole Microsoft built in to the licensing changes to benefit moves to Azure).
While AWS is obviously unhappy with the licensing changes (and obviously also unhappy with Microsoft's big upset win with the JEDI contract), some of the market research AWS revealed during the keynote points to why. According to AWS, 97% of the $3.7 Trillion IT market is still "on prem," that is running on company specific servers and not in the cloud. While AWS has the lion's share of business cloud computing, it's a small drop in the bucket compared to the potential market, with a large percentage of those on prem installations running Microsoft products.
Microsoft is trying to make it as easy as possible for that 3.7 trillion dollars to move to Azure (and make it more difficult to have them move to AWS). AWS is also working hard to break into the hybrid cloud market (where some computing resources remain on prem while others exist in the cloud), another area that Microsoft could have a leg up, currently.
Amazon has a $36 billion dollar cloud business, but it's clear that Microsoft is in the fight for the long haul, with both a solid base of on prem users looking to modernize, and a track record of ruthless business dealings. Amazon is protesting Microsoft's JEDI contract award, and you can expect to see continued battles from these two cloud giants.