Microsoft wins battle for Boeing in war with AWS

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Microsoft wins battle for Boeing in war with AWS

By Clint Boulton as written on cio.com

Boeing chose the Azure cloud platform because Microsoft agreed to collaborate on analytics software intended to help improve operational efficiency in the narrow margin aviation sector.

Boeing's decision to run its aviation analytics applications on the Azure cloud computing software is a big win for Microsoft, which is chasing Amazon Web Services (AWS) in the high-stakes race to sell computing, storage and other infrastructure software over the internet. The aerospace giant based its choice largely on Microsoft’s willingness to help it develop applications to serve its 300 airline customers, which are starved for ways to optimize fuel efficiency and better manage fleets.
"The combination of technical acumen and depth, as well as where they're investing and how they're addressing the business customer, really matched up with our objectives," says Andrew Gendreau, director of advanced information solutions at Boeing's digital aviation unit. He tells CIO.com that Microsoft also impressed with its commitment to advancing its Cortana analytics and internet of things suites as well as augmented reality, which could play a big factor modeling aviation modeling.
That even a division within a large enterprise would standardize on Azure shows just how far the platform has come in a few years. AWS grabbed an early lead in corporate cloud infrastructure a decade ago as developers began consuming its elastic storage and compute services. With AWS proving reliable and cost-effective, developers sung AWS' praises, boasting that the capability to spin up and shut down servers at will made application development more nimble. AWS soon began attracting larger corporate customers, notably Netflix, Capital One, Pfizer and the CIA.

Boeing deal shows Microsoft no longer 'bumbling around'

Azure has come on strong under the leadership of CEO Satya Nadella, whose mobile first, cloud first strategy is resonating with CIOs. Pattonair CIO Brian Long recently told CIO.com that CIOs have noticed how Microsoft has "gotten its act together," entering the mobile and cloud frays after a few years of "bumbling around."
Boeing's digital aviation unit chose Azure after using AWS, CenturyLink and other vendors. Gendreau acknowledges that while there are "players that accelerate your business" most cloud providers offer point solutions, which can introduce complexity in Boeing customer's aircraft systems. Conversely, Microsoft is willing to work closely with organizations to understand their business objectives and provide more comprehensive software suites.
Gendreau says Microsoft will help Boeing generate analytics that enable predictive aircraft maintenance, optimize fuel efficiency and fleet management in an industry where margins are razor thin. While airlines globally generate about $700 billion in revenue, they spend about $700 billion in operating costs, Gendreau says. Ensuring access to real-time machine information will assist pilots, mechanics, dispatchers and flight attendants in making flying more efficient. Ideally, this will help airlines sustain profitable growth.
"The aircraft are becoming smarter and smarter and the operators are all looking to gain more operational insights into what's happening on the aircraft," says Greg Jones, Microsoft’s global industry director for travel. "This is a true opportunity to look at what transformation can occur within the aviation space."
Several smaller organizations, from native cloud companies such as Box to the nearly 200-year-old publisher Houghton Mifflin Harcourt are using Azure. Yet if Microsoft is going to challenge AWS it needs more marquee enterprise customers like Boeing and General Electric, which earlier this month said that its Predix IoT platform would run on Azure.
Yet Microsoft faces a big challenge in a cloud market where exclusive deals remain hard to come by. AWS enjoys commercial relationships with Box, GE and Boeing.

In AWS, Microsoft faces stiff test

Ed Anderson, a Gartner analyst who tracks the cloud computing market, says Microsoft’s recent enterprise wins underscores how traditional businesses such as GE and Boeing are adopting progressive computing approaches, including cloud, IoT and machine intelligence. “The fact that Boeing announced this with Microsoft rather than with AWS shows some traction that Microsoft is gaining,” says Anderson. “It’s very important for Microsoft to win deals like this.”
AWS played a major role in driving Amazon.com's profitable second quarter Thursday, reporting revenue of $2.87 billion, up 58 percent from the same period in 2015 and the most it ever delivered in one quarter. If AWS keeps up the pace, it will easily exceed the $10 billion run rate CEO Jeff Bezos foreshadowed for 2016. And there's no signs of slippage: Salesforce.com selected AWS as its preferred public cloud infrastructure provider and Kellogg’s, Brooks Brothers, Ferrara Candy Company are all running critical SAP business applications on AWS.
Microsoft’s cloud business is on a bit of a tear itself. The company said earlier this month that its fourth-quarter revenue from Azure grew 102 percent, while Azure compute usage doubled year-over-year. Its Intelligent Cloud, which includes server Windows Server and Azure, grew 7 percent to $6.7 billion. More broadly, Microsoft’s commercial cloud business, which includes Azure, as well as Office 365 and Dynamics CRM, achieved a $12 billion run rate, up from $10 billion in its previous quarter.
However, Microsoft’s accounting practices – it declines to disclose revenues for Azure alone -- make apples-to-apples comparisons between Azure and AWS impossible. Anderson says that while Microsoft’s enterprise reach goes deep, particularly with businesses that use .NET applications and that have inked enterprise agreements, AWS enjoys the pole position in the public cloud market. As such,Anderson says, Microsoft “must go the extra mile to attract some of these big deals.”

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