At the time of this writing (in early April), one of the biggest days in the UK horseracing calendar, Aintree’s Grand National Day, was upcoming. This seemed to me prophetic, as people often state that AWS is the leader in a one-horse race. Historically, yes, it has often appeared to be in a one-horse race, smashing competitors left, right, and center—first humiliating VMware, the godparent of the cloud, by beating it at its own game, then by crushing other, more traditional companies’ cloud aspirations without thought.

Many believed this battle, if not the war, had been well and truly won and that AWS was the victor. It had even clipped the wings of Google.

However, the war is raging again. Now, AWS’s competition is from a company that, five years ago, many had predicted would wither and die due to the relentless rise of cloud and open-source software’s destruction of its installed server and application base. Microsoft’s Azure and Office 365 clouds are growing at a phenomenal rate. There are still significant gaps in Azure’s feature list compared to AWS, but that is not the issue here. Microsoft as a company is a master of this type of warfare. It has seen many primary movers off in its rise to prominence. It has done this from positions of weakness. Its first major scalp was Novell, when it moved from being a desktop-device-only provider to providing Server-based operating systems, and in 2000 it introduced Active Directory, a vastly inferior product. However, though a process of continual improvement, it effectively killed the technically superior Novell eDirectory. Well, through that and a much better marketing engine, which targeted the budget owners rather than the technical staff. It replicated this model with its Office suite, email product, and SQL Server, starting with low-hanging fruit and moving up the stack as features were added to improve functionality, stability, and scale.

In 2008, Microsoft announced Windows Azure, its public cloud offering. To be fair, it was much derided at the time. However, fast-forward nine years, and the landscape is completely different. The change of CEO from Balmer to Nadela has been much more than a figurehead change. Balmer was all about shareholder value, and from that position, there is no denying that he was successful. However, Nadela as a CEO reminds me much more of a Steve Jobs: charismatic and visionary. What he has done for Microsoft is to make it relevant again.

He has moved Microsoft from a position of weakness to one of power by embracing open source and empowering his staff to make decisions. They have found their lost mojo. Azure is moving forward in leaps and bounds in terms of features, closing the gap on AWS. In Europe, it is gaining more new customers than AWS is. Now, the interesting thing here is that Microsoft still has an ace up its sleeve in the form of Azure Stack. This is its hybrid/private cloud offering that is currently in Technical Preview 3 and is due to be released to general availability in the fall of 2017. This is a product that AWS does not have; it is currently a pure public cloud play. For the first time, AWS is going to be behind its first valid competitor. AWS is also facing competition from that other bear of a company, Oracle, which has finally woken up to the fact that cloud is eating its lunch. That said, Oracle is in a slightly different position than Microsoft; its software powers some of the largest enterprises’ mission-critical applications and holds in its databases companies’ crown jewels.

Will AWS wither and die? No. It has a very large and, on the whole, satisfied customer base, including many significant multimedia customers. Will it have everything its own way in the future? Most assuredly not. Microsoft, with its Office 365 and Azure products, will start to eat away at the lower end. Micorsoft is the master of dumbing down difficult concepts. Its point-and-click mentality has humanized computing. Now, that powerhouse is front and center on cloud technologies with, for the first time, a CEO who actually gets it. AWS is in for a rocky time.