Hosting Providers Don’t Fear Amazon Cloud; But They Do Fear…
Hosting providers, for the most part, don’t fear competition from Amazon Web Services (NASDAQ: AMZN). Instead, they fear peer rivals like Rackspace (NYSE: RAX) and SoftLayer, and they also worry about an overcrowded cloud services market, where competing on price alone is nearly impossible. Those are the conclusions of a ScienceLogic survey recently conducted at HostingCon 2012.
Among the survey highlights:
- nearly 50 percent of survey participants name “price wars” as the greatest threat to the industry.
- Competition from large cloud providers, such as Amazon, Facebook and Google, comes in a distant second, with only 39 percent of respondents naming it as a threat.
- Almost 60 percent cited management and support as the main way to differentiate from competitors, while only 34 percent cited price as a strategy to differentiate from the competition.
- 46 percent of respondents say they have no plans to use any integrated stacks, which included VCE, UCS and OpenStack. VCE is short for Virtual Compute Environment — backed by VMware, Cisco and EMC. UCS is short for Unified Compute System, backed by Cisco. OpenStack is an open source cloud platform.
- Only one in six see Amazon Web Services as their biggest competitor, while Rackspace and SoftLayer are top of mind when it comes to competition.
Interesting tidbits. But here’s a piece not covered in those bullet points: Talkin’ Cloud believes the most profitable, most defendable cloud services providers (CSPs) will have their own software development teams delivering full-blown applications or integration code that tie together multiple cloud apps. To differentiate in the cloud for the long haul, the best CSPs will own some software intellectual property.