Amazon.com, Inc. (NASDAQ:AMZN) vs Microsoft Corporation (NASDAQ:MSFT): Enterprise Wars

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Amazon.com, Inc. (NASDAQ:AMZN) is rapidly expanding its foothold in the Enterprise market with its Cloud computing platform, which is now a direct threat to the behemoths like Microsoft Corporation (NASDAQ:MSFT). On Tuesday, Amazon.com, Inc. (NASDAQ:AMZN) launched a new video conferencing and collaboration app, Chime, which is built on AWS platform. Chime will allows users to do VoIP calls, video messages and virtual meetings. There are several virtual meeting tools in the market, including Google Hangouts, Microsoft Corporation (NASDAQ:MSFT) Skype of Business, GoToMeeting and Cisco WebEx, but hardly any of them provides a hassle-free solution. Chime starts with $2.50 per user a month and the price goes to $15 per user a month for video and screen sharing as additional features. Chime also tells which users have noise issues during a conversation, making it easier to detect and fix problems. With Chime, Amazon.com, Inc. (NASDAQ:AMZN) has entered into the unified communications market, which is expected to have a total value of about $22 billion by 2020, according to market research firm Garner.

Microsoft Corporation (NASDAQ:MSFT) is under threat from Amazon.com, Inc. (NASDAQ:AMZN) Enterprise moves and new market entrants like Slack. Slack recently launched a huge collaboration suite for the Enterprise called “Enterprise Grid”. Microsoft’s Skype for Business is now losing its steam. However, its Azure Cloud revenue surged by 93% in the second quarter, but it lags behind Amazon.com, Inc. (NASDAQ:AMZN) Cloud which is almost a $12 billion business. Microsoft’s enterprise services revenue slipped by 4% in the period due to custom support agreements for Windows Server 2003.
 
Amazon.com, Inc. (NASDAQ:AMZN) also has Platform-as-a-Service solution which gives it a huge edge in the Cloud market. Its solutions like Aurora database management service, which brings in about $1 billion annually, dwarfs the SQL services provided by Microsoft Corporation (NASDAQ:MSFT) in Enterprise.
 
Amazon.com, Inc. (NASDAQ:AMZN) launched AWS Marketplace in 2014, and this platform has now become the primary mode of revenue growth for the company in Enterprise. AWS Marketplace has Desktop Apps and WorkSpaces Applications Manager (WAM), which allow third parties to sell productivity apps and SaaS software to companies through its Marketplace. In other words, Amazon Marketplace is like an app store for Enterprise.
 
Wedbush analyst Michael Pachter notes that AWS Marketplace will grow into a “several billion dollar” business by 2020, and will contribute 30% of sales to the operating profit line of Amazon. Amazon.com, Inc. (NASDAQ:AMZN) is monetizing its vast customer base in Enterprise to sell and grow its new services.

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