Some of Silicon Valley's biggest tech giants have their knives out in order to remain aggressive in the burgeoning cloud market and Microsoft (MSFT) is no exception.
The Redmond, Wash.-based company has been trying to catch up withAmazon (AMZN) , which has seen its cloud offering Amazon Web Services grow at rapid clip, with revenue increasing 42% year-over-year in the most recent quarter. On top of that, Amazon Web Services is estimated to have grabbed 33% of the global market share during the first quarter, besting Microsoft's second-place ranking of a 10% share, according to Synergy Research Group.
At the JP Morgan TMT conference in Boston on Tuesday, Microsoft's chief marketing officer Chris Capossela said the company is vying to be the No. 1 cloud computing service provider, but also sees opportunity in being second best for now. In order to get ahead, though, Capossela said Microsoft is betting on the fact that consumers want a hybrid cloud platform that can be personalized. Hybrid cloud platforms are a mix of on-premises, private cloud and public cloud environments -- a service that, according to some experts, Microsoft has been able to champion as Amazon has focused mostly on the public cloud environment.
Capossela pointed to Microsoft's Azure Stack product, which is a hybrid cloud operating platform that's expected in mid-2017, as a product that's likely to be in high demand.
"So Microsoft is really the only one who can take you from your data center to a hybrid datacenter to the public cloud," he explained. "And that alone is a massive, massive advantage as big enterprise IT moves from holding on to everything to realizing that...the world is a blend of public and hybrid and private, which is something that plays to Microsoft's strength."
Some businesses have also said they may want to use multiple cloud vendors at one time, Capossela added. "[Companies] just want the ability to sort of say, hey, it's going to be better for my company if I use multiple vendors here," Capossela said. "And given that Amazon is in the top spot and we're in the second spot, we have a lot of headroom from simply plain balance of trade."
Microsoft has also landed several big contracts this year that have helped the company further gain share among multinational corporations. Danish shipping giant Maersk has agreed to use Azure to manage its supply chain and global trade, while UBS is also using Azure to handle its risk management processes.
Aside from offering hybrid cloud services, Capossela said Microsoft Azure comes with "higher-level services" like Office 365 and its customer relationship management platform Dynamics 365 that are appealing to companies and consumers. Capossela also claims that Microsoft is the only U.S. public cloud company that operates legally in China. Amazon, for its part, has said it plans to build data centers in China and has an existing partnership with Chinese internet provider Beijing Sinnet Technology.
When asked to clarify, Capossela said Microsoft is the only U.S. multinational to have a joint venture that's recognized by the Chinese government.
"There are Chinese companies that do it, of course," Capossela added. "We're the only multinational that does that."
China may be the next major frontier for cloud companies to conquer, as the region's cloud computing market is expected to surge in the coming years. By 2020, China's cloud computing market could be worth as much as $20 billion, up from $1.5 billion in 2013, according to a report from the U.S. International Trade Administration.
That comes as Gartner estimates the worldwide public cloud services market will grow 18% year-over-year to roughly $246 billion in 2017, eventually reaching about $383 billion by 2020.
Editors' pick: Originally published May 23.