This morning I was part of a panel debate hosted by GigaOM’s David Meyer and joined by OnApp CEO Ditlev Bredahl. A quick poll of the audience showed a number of service providers in the room looking to understand how to take on Amazon (the title of the session after all was Amazon vs. the world: How can cloud service providers compete?).
I thought I’d take a minute to highlight what we agreed and disagreed on:
1) We agree that service providers can no longer be complacent in thinking that they have lots and lots of time to do something about cloud. And while it is widely agreed that cloud is as Barb Darrow said in her earlier session with Dell ‘in the second inning, it is not feasible for service providers to hang about either investigating options or building their own platform’. They need to make a decision and need to do it now.
2) We also agree that service providers need to identify what makes them special, what is there position of strength. Is it customer service, location, performance, value added service. The difference in opinion is then on how you grow beyond your specialty.
3) We wholeheartedly disagree that federation is the right approach for service providers to grow. Instead we believe it’s only valid use case is as a short term approach to using spare capacity. Federation, we believe, leads to commoditization because you are only able to compete at the lowest level, the infrastructure itself. We believe it is what you put on top of the infrastructure, how you add value through additional services, applications and functionality. Differentiation is at the heart of this and where service providers can and will compete.