This post was inspired by an article by David S. Linthicum
“Get big, get niche or get out” is a popular saying in the IT industry, and this is at least as true in the cloud computing market as in any other.
Many service providers know that trying to compete head on with cloud industry giants like Amazon, Microsoft et al, with the economies of scale that they enjoy and the resulting aggressiveness of their pricing, is pointless. Trying to match or beat these prices on a like for like basis while maintaining profitability doesn’t work either – the math simply don’t add up.
If you can’t differentiate on price alone however, you can still differentiate by specialization:
- Identify what your core capabilities as a service provider are and what markets this allows you to address better than the competition
- Focus your market positioning and business strategy on these target markets
- Partner with other technologies that can enable you to offer your customers a flexible, tailored cloud service that can meet their specific business needs, faster and more cost-effectively than trying to do this by yourself
- Launch a cloud service optimized for your niche market
As cloud computing increasingly becomes accepted as the default model for delivering infrastructure and applications, the same specialized differentiation that has allowed you to survive in a market dominated by the likes of Amazon is what will enable you to remain relevant in a market that is itself moving towards favoring niche players.
As David S. Linthicum writes in his article:
“…you can count on AWS to easily be worth $100 billion or more in three to four years. However, with the entire market growing 100 times that size in four years, there is a lot of cloud computing value to go around. So, it won’t be as much AWS versus the world, as AWS dominates a particular area of the market, with other solid contenders in that area as well.”
Whether you specialize in a particular vertical, geography, platform or application, you will require a cloud platform that enables you to keep your own branding, extend functionality as required and customize the interface through which your customers consume your services.
Flexiant have long argued that the ability to differentiate is key. Back in November 2013 we published a white paper, “Arming the Cloud Service Provider to Compete”, that covers this in depth.
There has never been a better time to establish what segment of the cloud services market you are best placed to be a leader in, and to align your strategy with this moving forward. Take advantage of the technology available to support you and start developing your competitive edge not just for today, but the foreseeable future.
Image provided by: Michael Glasgow