0: - [Narrator] IBM, Google, Microsoft,
3: all are making big bets on cloud computing.
6: That's for good reason.
8: Research firm Gartner forecasts cloud computing revenues
11: to exceed $260 billion dollars in 2020.
14: For years Amazon's AWS led the market.
17: But, that lead is starting to slip as other firms make moves
21: to bolster their cloud computing offerings.
23: In October, Microsoft surprised onlookers when it won
26: the U.S. military's JEDI cloud contract.
29: It could be worth $10 billion dollars over 10 years.
32: Some in Washington expect Amazon to appeal this decision.
36: In July, IBM spent $34 billion dollars to acquire RedHat
40: and boost it's cloud business.
42: So, why are tech firms going to battle for cloud services?
45: To understand, you've got to know the basics.
48: - Well, and like any market that grows
50: it's strong because it offers a value proposition
52: to people that they find attractive,
54: and so they shift their spending.
56: - [Narrator] Cloud computing at it's core,
58: is about changing the way businesses manage data.
61: Everything done online; shopping, video, texts,
64: it all takes data.
65: The data is processed in behind
67: the scenes computers called servers.
69: Managing that equipment takes time, energy, and money.
73: When a business moves to the cloud
75: it's really just outsourcing.
76: In other words, tech firms like Amazon
78: handle some IT services
80: so businesses can focus on what they do best.
83: Outsourcing IT can generate savings.
86: For example, Bank of America adopted hybrid cloud computing
89: and that reduced annual costs by $2.1 billion dollars.
95: Start-ups who uses a cloud provider won't have
97: to spend as much on a custom data center.
99: They can use resources from a third party.
102: In-house IT has to maintain enough server space
104: to account for peak demand.
106: That can mean that your company has a bigger data center
109: than it needs on a consistent basis.
111: Instead, cloud computing lets companies
113: pool their resources.
115: The companies use as many servers as they need
117: and only pay for what they consume.
120: Companies that use the cloud can benefit from
122: the remote management of data
124: in places like Ashburn, Virginia.
126: Amazon, IBM, and others host some of their data centers
129: in less populated areas like this.
131: Both energy and land can be cheaper here
134: than say, a city center.
135: That's why you see groups like Facebook
137: and the NSA opening data centers in small towns in Utah.
141: There's potential for lower costs,
143: the views aren't bad, either.
145: Cloud computing is tougher for some businesses than others.
148: In the years after the launch of AWS,
150: businesses like Netflix, Lyft, and Slack launched products
154: with intense IT demands.
155: They were a natural fit for cloud computing.
158: Some companies who are moving to the cloud today are bigger,
161: and are in more regulated industries
163: like health and finance.
164: They're companies like J.P. Morgan
166: which operates under strict standards
167: from regulators like FINRA.
169: In 2017, Dana Deasy was the chief information officer.
173: At the time, he moved portions of
175: the financial giant's data to the cloud.
178: His next task will be even more formidable,
181: do the same for the Defense Department.
183: - So, I've mentioned we have a need
185: for an enterprise cloud,
187: so we have massive compute capability where we can start
190: to store our data in a more common way
192: and make it accessible.
194: - [Narrator] The multi-billion Joint Enterprise Defense
196: initiative is supposed to centralize
197: the military's technology and reap gains in innovation.
200: Getting there will mean untangling years
203: of disparate IT systems.
204: That will take time, money, and expertise,
207: which is why Microsoft's potential win is so significant.
211: Amazon is no longer the only big name in cloud computing.
214: Microsoft's Azure Cloud service was announced three years
217: after Amazon AWS took an early lead.
220: More than a decade has passed
222: and AWS still dwarfs Azure in revenues.
225: But, more deals are on the horizon.
227: - The cloud markets are still relatively small.
231: So, their growth rate naturally is going to be higher.
233: And we do see that growth rate coming down slightly
236: over time as the cloud markets get bigger.
239: But, the strong growth rates are still driven by the fact
242: that people prefer cloud models over the traditional models
246: for a lot of their work loads.
249: - [Narrator] Which is why you see
250: the largest firms in tech betting big on the cloud.
253: Billions of dollars hang in the balance.
Which companies control the cloud? Do you know what cloud computing actually is? In this great video from The Wall Street Journal our presenter gives us an explanation of what cloud computing is, and how it is changing the world we live in. The video also looks at which companies are winning the battle to dominate the cloud computing market.
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The Wall Street Journal is the most important financial newspaper in the United States, and one of the most respected Financial newspapers in the world. The videos in this channel look at current affairs and particularly at events and trends which affect the financial markets. The WSJ journalists tend to use quite sophisticated English so the videos are mainly suitable for students who have advanced level English.