Amazon is the undisputed leader in the Cloud market. However, there is still some space for other players, especially those that focus on meeting the specific needs of particular industries.
How is the Cloud market currently structured? What are the various options for a company?
The Cloud, which everyone is talking about nowadays, is basically the option of buying computing-on-demand. First of all you can buyinfrastructure. This is the service provided by Amazon, which was the first company to launch this in 2006 with Amazon Web Services. Amazon is now the market leader. Microsoft also offers this service, with Azure, and in France so do companies such as CloudWatt and Numergy. The second aspect of the Cloud is that a company can also buy applications, or business services. These applications may be B2B, as in the case with Salesforce, or more for the mass market, such as Dropbox or video-on-demand services.
Does this leave any room for other players?
For the moment, Amazon is way out in front in this market – in fact it’s ten times bigger than the number 2 provider. Over the last two years there has been no change at all at the top, which leaves Amazon with a huge lead. Amazon’s essential attribute is that it continues to innovate on an ongoing basis, which is quite surprising for a market leader. However, I am convinced that there is still space for other players, but they will need to have the resources, and they will have to find their niche in relation to this giant.
How can these other players differentiate themselves? What will they bring to the market?
One way for a company to differentiate itself would be by geography. Amazon is still after all a US company and there are many reasons why French companies would prefer to do business with French suppliers. Secondly, Amazon has built its success on B2B2C. In other words, the market which Amazon’s customers address – Dropbox and Netflix for instance – is the general public. It cannot be taken as read that Amazon has everything it needs to address the purely B2B sector. That’s a different market, with specific needs. There are already Cloud suppliers who specialize in a particular sector, incorporating business-specific applications. This is for example the situation in the healthcare and media sectors, where dedicated suppliers have arisen that are closely integrated into the processes of their customers. And lastly, though Amazon has been innovating faster than anyone else over the last two years, the OpenStack open-source community is growing very fast. It’s therefore totally possible that within a few years Cloud innovation might be taking place in open source, which means more outside the walls of Amazon, rather than at a private company, even though that company may be the leader. So yes, I do believe there are a number of potential differentiators in this market.