Amazon.com has it all - books, videos, music, household appliances and petabytes of cloud-based storage.

In the three years since Amazon converted some of its vast e-commerce capacity for its Elastic Cloud Computing (EC2) and Simple Storage Service (S3), it has become synonymous with cloud computing. The buzz is so great about Amazon's place in the cloud that it even overshadows traditional heavyweights Microsoft and Google.

But Rackspace isn't intimidated by Amazon's success in the cloud, saying it's closing the gap on its rival and looks to overtake the bookseller turned cloud pioneer.

In an interview with Reuters, Rackspace CEO Lanham Napier says his cloud business is growing more than 100 percent year over year and now accounts for more than 10 percent of the hosting company's revenue.

"We have increased our competitiveness in 2009. Relative to certain competitors, we're absolutely gaining market share," Napier told Reuters. "A year ago, Amazon was incredibly far ahead of us. This year we've closed the gap."

In terms of revenue, Rackspace is substantially smaller than Amazon, posting revenues of roughly $530 million. If Napier's estimates are correct, it means Rackspace earns roughly $55 million to $60 million from cloud computing. Amazon's revenues are in excess of $19 billion, of which $220 million is generated by the EC2, S3 and Amazon Web Services (AWS). It's a substantial difference, and Rackspace is still a long way from closing that gap.

But the Napier's comments may be more than bravado. Rackspace—the decade-old hosting company—has something that Amazon doesn't have: enterprise legacy. Rackspace, which earns most of its money from hosting and application services for small and midsize businesses, has greater experience in servicing the B2B community. It's been leveraging its business experience to move more into the enterprise market to take on the likes of Hewlett-Packard and IBM.

Could that experience and ambition give Rackspace the edge over Amazon in the cloud? Perhaps, considering the criticism that's been leveled against Amazon over the security of its cloud infrastructure. Amazon has earned high marks by analysts for its ability to deliver cloud infrastructure and services. However, critics say Amazon's lack of transparency into its security practices and the lack of third-party audits of its data centers level doubt about the quality of its security.

Now these aren't the only two companies in the cloud. Channel-friendly hosting company The Planet is greedily eyeing its place in the cloud. Google and Microsoft are rapidly expanding their cloud platform services. And traditional players such as HP, IBM and AT&T are staking their place in the cloud. But the war of words and market share between Amazon and Rackspace appears to be a precursor to greater battles for cloud supremacy.