The Two Battles in the Cloud, Brands and Profits

The NYTimes has a post on the idea of the Cloud Cartel.

Here Come the Cloud Cartels

January 30, 2012, 9:00 AM 6

What kind of cartels will deliver business computing, and how should businesses respond?

Forrester, the technology research company, just released its business and technology outlook for 2020. The short version is that cloud computing will come on quicker than you think, it will be controlled by a very few companies that will fight for the right to own your data, and businesses need to think about what software they can write that will differentiate them from all the other customers of these giants.

Like a lot of these reports, Forrester has a couple of clichés (we have entered the era of individual empowerment; change is the only constant) and interesting facts that you don’t really know what to do with (there will be 22 billion connected devices in 2020; Moore’s Law dictates that the computing power of I.B.M.’s Watson will fit into a human hand by then).

One of the points well made is the move to the cloud and mobile,  and how there will be a shift in the IT powerhouses.

The substance of the report, however, is plain: cloud and mobile computing combined will rapidly improve, dislodging many incumbents in enterprise computing, and vastly empowering a few others, becoming what Forrester calls “computing cartels” that control millions of servers in data centers around the globe. These cartels, the report says, will include Amazon, Cisco Systems, Google, I.B.M., Microsoft, Oracle and a few competitors. Like most of these reports, it does not name losers, though Hewlett-Packard and Dell were among those noticeably absent.

The Cloud is very confusing, and one way to filter the communication is to understand whether something is written for a battle of the brands to create awareness for their solution vs. the battle for profits where companies are grabbing market share from others.  You may think they are the same.  But a Brand Battle will be more creative in defining perceptions.  A Profit Battle will be how do I get the money from the IT department.  The Cloud has been succeeding when business units decide to bypass their internal IT department and buy cloud services direct at a lower cost.

The Brand Battles are going to be fought by the established enterprise companies that have the budgets to fund analyst reports - IBM, EMC, Cisco, HP, VMware, Dell, and Microsoft.  The Profit Battle are those who want to disrupt the status quo - Amazon, Rackspace (OpenStack), and many others that don't have a big marketing budget.

The fight for the Cloud is like a big Go Board.

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There are multiple battles for territory going on, and it easy for a big brand to claim it is winning in its area.  But, there is not a scorekeeper for the complete Cloud game.

You can argue over who is winning the cloud game.  But, it can more interesting to know who has adapted to the cloud to win other games.

The cloud is disruptive and those who understand who is winning these other cloud enabled games has the knowledge to play the cloud game differently than a simple brand or profit game.