There was a point when every major tech company decided to jump into the cloud business until Amazon decided to flex its muscle by cutting prices and adding tons of features. We have seen companies like HP let go of their Helion Public cloud and now Verizon is joining the list of providers who are giving up on cloud.
Verizon is planning to shut down Verizon Public Cloud and Reserved Public Cloud, however Verizon Private Cloud and Verizon Storage Cloud still stay active. The main reason for Verizon shutting down is Amazon and Microsoft. Amazon is doing around $10 billion while Microsoft is doing around $1 billion for their cloud business. For Verizon, the tough market environment is preventing it from gaining traction. Microsoft, Amazon and Google are fighting a price war by slashing prices on their cloud offering. The price war alone killed a lot of small cloud vendors from the market.
Overall, the public cloud offering by Verizon was part of wireline services such as dark fiber, wavelengths, VPN etc. The wireless services are a huge revenue generator and the public cloud service only makes up a small percentage. Verizon is working hard to diversify it’s business by selling landline phone, ISP, TV and data center. While it’s selling old wireline business, it is acquiring internet brands like AOL and pushing into ads and online content.
The main focus for Verizon now is private and hybrid cloud for enterprise and government sector. Today the public cloud market is highly saturated and the price war among Google, AWS and Microsoft will continue until there is a clear winner.