Don’t Fear the Reaper — or AWS, Either

Brian Wood Blog

Some people prefer to buy whatever is cheap and easy and ubiquitous — Starbucks, Subway, AWS — but other prefer a bit more variety, customization, and service — Peets, Jersey Mike’s, and AIS.

That’s OK; vive la différence — and besides, there’s plenty of cloud business to go around as described in the article below by Phillip Koblence in The Whir.

If everyone wanted the exact same thing, then the provider with the largest scale (and thus presumably the lowest per-unit costs) would win.

Good news: that’s not the case, so none of us need fear the grim reaper commonly known as AWS.

Emphasis in red added by me.

Brian Wood, VP Marketing

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Data Center Catharsis: Relax, There’s Enough Cloud for Everyone

Last week, Morgan Stanley had everyone talking with a new report that predicted, by 2022, Amazon Web Services would take over the IT services market with its retail approach to public cloud.

If you think AWS is big now, the report suggests, just wait until it forces out  competitors with ever-lower prices on cloud-based alternatives to traditional businesses like database, storage and management.

In terms of total impact, Morgan Stanley approximates that $152 billion is up for grabs, representing between 3 and 17 percent in enterprise IT spending.

While I grant that these are indeed impressive numbers, let me go on the record as stating that the Wal-Mart fears AWS has put into everyone doesn’t matter one bit for data center operators. That’s right, even though Jeff Bezos and facilities operators offer similar services, we could not be in more different businesses.

For AWS, it’s a game of scale–of capturing more market share than Azure, Google and Rackspace. For providers, it’s about customer quality, first, last and always.

Talk like this won’t put us on CNBC anytime soon. But the data center services business, like other customer-facing endeavors, requires an absence of ego. You have to be in a position to deliver a solution that perfectly fits a customer’s needs, not one that offers the cheapest off-the-rack alternative.

AWS senior VP Adam Selipsky admitted as much more than a year ago in an InformationWeek interview. “A lot of technology business is a good business with high margins. But that’s not Amazon’s strategy,” he said. “Amazon’s approach reflects its roots in the business of retail. We drive the scale of business and lower prices.”

I don’t begrudge AWS the business it’s in. But what is lost in the flurry percentage points is the wealth of business services still available to data center operators who pursue quality over quantity.

What looks like zero growth in the billion-dollar scheme is a great business in robust specialty markets with a sophisticated, discerning clientele that demand the hands-on attentiveness that only boutique providers can deliver.

Financial services, pharmaceuticals, medical devices, law, insurance. These are all rich veins for data center operators pursuing the quality approach.

Gartner agrees. So does Ernst  & Young. Cloud has come a long way in the past few years, but it still is quite lacking in security, which is why for specialty industries, hybrid cloud deployments that mix on-premise and virtual solutions are not a luxury; they are a business necessity.

While Amazon would have you believe that cloud is a territory that they will soon dominate, there is more than enough cloud to go around. IDC predicts global ICT spending in 2013 to reach 3.7 trillion.

That is a staggering figure, which, with the blurring of traditional service categories, should make even the most frazzled data center operator smile.

http://www.thewhir.com/blog/data-center-catharsis-relax-theres-enough-cloud-for-everyone