Amazon's Cloud Competition Has Reason To Worry

CLSA thinks Amazon.com, Inc.'s AMZN cloud competition has reinforced its worry on the Underperform-rated shares of Oracle Corporation ORCL and Teradata Corporation TDC. The comments came after attending the AWS summit.

Analyst Ed Maguire could see Amazon's AWS expanding at a rapid pace of its highly-integrated services portfolio. He pointed out that customers' decisions were in favor of going "all-in" from the cloud service provider. AWS performance has surprised both the Street and analysts after the company started reporting its results separately.

"We were surprised by the superlative enthusiasm for RedShift among customers and partners. Users praise the scalability, performance and particularly the cost and opex payment model. There are a number of large users including GE, with the largest implementation a multi petabyte Chinese carrier. One partner shares an estimate of 150,000 customers, which would translate to roughly 15% penetration within the customer base," the analyst wrote in a note.

Amazon's cloud products are liked by its customers since it provided the final destination for database migrations. The company's TAWS is another product that drew attention from users who are seeking the cheap S3 storage and EC2 computing.

Therefore, the brokerage pointed out that a common trajectory is to shift for Amazon's Aurora or RedShift from Oracle RDS. The analyst also sees migration from Teradata continuing thus worrying the rivals.