Venture capitalist Brad Feld recently wrote an interesting post predicting the end of Amazon's dominance of the cloud computing market, and concluded, "it’s suddenly a good time to be Microsoft or Google in the cloud computing wars."
I'd go one step farther. Using Feld's arguments, I'd say that Microsoft is in the driver's seat.
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First, the price war. Microsoft and Google are on approximately equal ground when it comes to cutting prices -- both have highly profitable core businesses that they can use to subsidize a price war in cloud infrastructure, even to the point of sustaining losses for a while to gain market share. Amazon does not.