Competing Successfully in the Cloud Space
Competing Successfully in the Cloud Space by UCStrategies Staff
The cloud computing services space is generating an increasing amount of opportunities, and SMB cloud providers are to get a piece of the action. The market is becoming more competitive and it is essential that the smaller players are able to leverage themselves up and successfully compete against the more incumbent figures in the industry. The larger hosting providers are able to decrease pricing and control the margin, and it is this which must be countered.
CRN reports that 50 percent of respondents in a survey noted that cloud war prices were the biggest threat to their business; the specifics of the opportunities afforded to SMB providers must therefore be considered, particularly when it comes to creating services which provide differentiation and can assist in retaining a provider's position alongside stronger industry players.
Cloud Computing has attracted a lot of interest over the last few years, and the field has developed to such an extent that cloud technologies are able to offer more robust public, private and hybrid opportunities in the cloud for testing, development applications and enterprise applications.
Commoditization, for example, IT as a service, which increases pressure on hosting providers (particularly SMB hosts) to launch and justify higher-margin cloud services to differentiate themselves from the competition, is a key focus of cloud computing. Offering value-added services which are targeted towards critical business goals, like proactive enterprise-class management and support and managed application services, is also a wise move.
A variety of open-source and homegrown tools for management and monitoring are also encouraged by many SMB hosters. These systems are broadened in order to reduce time and cost expenditure, and as the business matures, reach a point of inflection where tools which were initially cheap or free become more complicated, expensive and harder to maintain.
Automated technology is another investment which needs to be considered and this will intelligently make any human intervention obsolete; it will not make much profit over the long term and would need to be replaced with solutions which will more likely heighten profit and scale-on-demand. Operational efficiency and agility will also need to be provided by cloud services, and they must be flexible enough to adapt to changing demands in real-time; this will additionally supply the provider with a competitive edge.
Amazon Web Services (AWS) persists in controlling the majority of mindshare among businesses. Similar to Google, AWS presents a threat to hosters, as does “price wars.” Recently, Amazon has also been attempting to focus on competition by gaining the attention of the hosting industry; the company is also attempting to co-opt smaller hosters to resell Amazon's services.
Co-opetition with AWS may take some time, but it is healthy and will encourage SMB hosters to look inwardly at their plans for growth and sustenance. It may be possible that competing against Amazon will deliver the best results; but reselling Amazon might also work. It is important, in light of this, that attention is focused and executed on the hoster's core competencies.
The industry is presently tough, and competing successfully and maintaining one's position will be difficult; it will require a shift in thinking. Those who benefit will have a differentiated services offering as well as reselling IaaS (like AWS), and may also be elevating themselves into the top-end of the industry.
Upgrading systems like security and billing will also be essential to keeping up with cloud developments. It will also be useful to introduce automation in daily workflow and rapid provisioning. Cloud management requirements relating to enterprise and service providers will become more complex and sophisticated, and new purpose-built tools for management and monitoring will be required.
Management tools from the old systems will not be good enough; opportunities will increase as the cloud expands and develops, and it is imperative that SMB hosters are educated on the choices for investment as this will be crucial to a successful strategy. It is also worthwhile to mention that options are currently cheaper than ever, and now is as good a time as any to take the plunge into the cloud space. (CY) Link