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Four out of five organizations require a transformation of their IT environments to meet business requirements over the next five years, according to the Voice of the Enterprise: Cloud Transformation Vendor Evaluations report from 451 Research. The “moderate” or “significant” transformation will involve migrating workloads to the cloud and continuing to increase cloud spending, according to the report.

Twenty-two percent of enterprises have adopted “cloud-first” approaches to IT, and the fastest-growing model of cloud use is IaaS/public cloud. IaaS vendors are still led by Amazon Web Services (AWS), but Microsoft Azure has emerged as the top competitor. Over half of respondents (55.8 percent) use AWS for IaaS, and it scored the highest among competitors for multiple attributes. For the first time it did not score the highest, however, for “value for money/cost,” which Google Cloud Platform was rated highest for, and the “understands my business” category, in which both IBM/Softlayer and Microsoft scored higher.

Microsoft also leaped toward AWS in being considered the most important IaaS provider by enterprise respondents, increasing from 20 percent in the previous survey in 2015 to 35 percent, just behind AWS’ industry-leading 39 percent. More European respondents already consider Microsoft their top IaaS provider (43.7 percent) than AWS (32 percent), which 451 attributes a least in part to Microsoft’s efforts to address their data sovereignty concerns.

“It will be interesting to assess the impact of Azure Stack (scheduled for launch by mid-2017) on Microsoft’s overall positioning and individual attribute ratings for multi-cloud/hybrid support, as well as technical expertise and innovation,” said Melanie Posey, Research Vice President and lead analyst for 451’s Voice of the Enterprise: Cloud Transformation service.

AWS IaaS is most favorably perceived by customers, but both Microsoft and Google scored above average, and have higher adoption rates than in the previous survey. IaaS providers scores are generally high for service attributes like uptime, security, and technical expertise, but organizations gave them lower scores for understanding business requirements, multi-cloud/hybrid support and enterprise-level customer support.

“As organizations implement IT transformation in earnest, they are increasingly relying on strategic partners for operational assistance,” said Posey. “Those IaaS service providers who position infrastructure and technological innovation alongside meeting business requirements will be best positioned to capitalize on this market opportunity.”

Companies outside of the big four offering public cloud should be concerned by the report, in which they collectively scored the lowest for both promise and fulfillment of services.

Other indications of Azure’s mounting challenge to AWS include a survey of CIOs by Morgan Stanley in July indicating a higher rate of Azure adoption could drive it to higher market share than AWS as soon as 2019, and a report released in March by Sumo Logic focused on modern application tools rather than strictly IaaS, which shows Azure is the most popular public cloud vendor overall for companies with 500 or more employees.