PiperJaffray recently surveyed 135 CIOs in businesses with revenue ranging from below $100M to above $2B and found that Amazon's (NASDAQ: AMZN) AWS continues to take mindshare and will see increasing levels of spend. However, Microsoft's Azure also gained mindshare, likely at the expense of other vendors.

AWS took an additional 130bps of mindshare from competitors according to the 2016 survey, after taking 170bps in 2015. The analyst believes that this is due to AWS's superior functionality, scalability, faster pace of innovation and developer loyalty. While spending data did not offer precise levels of growth, 87% of CIOs intend to spend more on AWS in 2016 than in 2015.

Azure increased mindshare by 810 basis points. Azure's mindshare gains likely reduced the mindshare AWS accumulated, however, the analyst believes Azure's share gain in 2015 was the result of heavier marketing, pricing competitiveness, and rolling out workload functionality for Linux, Docker and other providers. He sees Azure as the only meaningful threat to AWS;

The analyst sees the cloud storage and compute industry as a duopoly, with AWS remaining the dominant player, Microsoft Azure second and Google, Rackspace and IBM trailing behind. At this point, it Azure appears to be the only credible threat to AWS.

No change to the Overweight rating or $800 PT.

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Shares of Amazon.com closed at $607.05 yesterday.