There is no cloud war. More accurately, there should not be a Cloud war.
Often, several of us think that the battles in the Cloud are around pricing. I have certainly thought that when Google had dropped prices. However as I was reflecting on this, I could not help but think what a waste that would be.
Consider the following:
- The real inhibitors to cloud adoption is legacy data center vendors. Cloud vendors need to fight legacy vendors and shift customer buying to Cloud services.
- Google or MSFT going after AWS is going after a fraction of the revenue that AWS currently makes. Not very big TAM. The growth for Cloud vendors does not come from convincing handful customers to shift from a competitor to your platform. The real growth comes from getting large enterprises not fully on Cloud to adopt your platform.
- AWS so far has focused on plumbing. Majority of services AWS offers today are plumbing that developers or IT will use to deliver end user value. In the evolution of Cloud, AWS is still offering rudimentary services. Often batteries are not included with AWS services. This is an opening for both Microsoft and Google.
- It is a mistake to assume that it is the role of consulting or cloud brokers to assemble services for customers. Cloud services can be delivered as a ready to use state for enterprises with consulting firms adding custom/domain value.
- Microsoft has experience offering fully baked solutions to enterprises. Google has some experience because of their efforts in Google Apps. Use this expertise to convert current customers of traditional vendors to ready to use Cloud solutions. They should not try to fight AWS on plumbing game. MSFT and Google also need to have decent infrastructure offering, but that’s not the end goal. They can overtake AWS in size by taking market share away from legacy vendors like SAP, IBM, Oracle.
Given this, focusing solely on pricing of IAAS services is not a very fruitful competitive exercise for MSFT or Google. Its great if you can drop prices, but make it just a footnote in your announcements.
To summarize in one tweet length: The war between cloud vendors is not a productive one. The war should really be between Cloud vendors and legacy vendors.