Amazon Web Services, Rackspace Compete for Cloud Market Share in Asia, Brazil

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Cloud computing rivals Amazon Web Services and Rackspace Hosting are going head to head, competing for market share in emerging markets, according to a report by

A couple weeks ago, Amazon Web Services said it will open a new data center in Sydney, just months after Rackspace announced it will open its new data center in Australia by the end of the year.

Now it looks as though Rackspace is following Amazon’s lead as the cloud hosting provider looks to expand its services in Brazil, a market AWS entered in December 2011.

But despite the two competitors expanding their cloud services in the same, new markets to build their respective international customer base, they each take on “two very different approaches,” Oppenheimer analyst Tim Horan said in a recent report.

Known for its “fanatical support,” Rackspace takes on a customer support-centric approach, where as AWS typically sells “self-service” products to companies that already have a certain degree of cloud expertise.

And although Amazon is still the current leader in cloud infrastructure services, Rackspace, which is a firm number 2, looks to further close the gap in market share between the two companies.

According to Bernstein Research estimates, AWS’ Q3 revenue were $474 million, a 88 percent increase over last year.

Meanwhile, Rackspace’s cloud computing division brings in nearly 24 percent of revenue. The company successfully increased its cloud revenue by 57 percent to $79.4 million in Q3 from Q2’s 69 percent growth.

In addition to its data centers in Australia and the US, AWS has data centers in Ireland, Singapore, Tokyo and Sao Paulo.

Rackspace is also looking to further expand beyond its one data center in Hong Kong, which it opened in 2008, as well as a facility in London, UK. Rackspace attributes 25 percent of its revenue outside the US, mostly from Europe.

Talk back: Do you think Rackspace will ever be able to successfully overtake Amazon Web Services in the cloud computing market? What other markets do you think the two companies will eventually expand in? Let us know in the comments.


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