As the giants of cloud services battle over market share, the smaller providers need to be more creative to stay relevant. In this article we will discuss the pros and cons of each, and offer insight into which type is right for you.

April 15, 2014

3 Min Read
David vs. Goliath: Which Cloud Provider is Right for You?

By Michael Brown 1

As often happens in the business world, cloud service providers are starting to feel the effect of a David versus Goliath type competition in the market space. However unlike the famous story featuring an extremely outmatched David claiming unlikely victory, it is much more difficult for the small players in the business world.

Dan Kusnetzsky gives a fantastic overview about the battle between small and large providers. The Goliaths of the cloud industry (Google, Amazon, Microsoft) are in a price race to the largest market share, leaving the David’s with less and less means to fight back. But before you begin to condemn and wail about the Goliath’s for their inevitable stomping of the little guys, they do have means to fight back. Not to mention each company should evaluate which type of provider suites them best, because both Goliaths and Davids have benefits, which is important to be aware of as an MSP.

The Goliaths

There is no denying that giants such as Google, Microsoft, and Amazon are doing their best to corner the cloud services market. They have the size and sustainability to win users based on price. “Google, AWS and Microsoft are slashing the price for cloud services. This new price war could change the entire industry. What’s going to happen to smaller service providers when their margins hit $0?”

These players can afford the biggest and best software, hardware, systems and assets, thus driving their costs significantly lower than their David-esque competitors. This results in much lower prices for end users. The level of service and interaction will likely not be as high with the largest of players, but if price and name are more important to the client, then these giants of the cloud offer a good option to MSPs.

The Davids

David had a shot against Goliath, so why can’t these smaller cloud service providers hold their own in the market. Well, they can. They just need to be a bit more creative as to how. “Small cloud services providers need to seek out every advantage they can find and keep dancing or they’re likely to get hurt as the bigger players engage one another.” Smaller providers are finding advantages with certain specified tools that allow them to compete with the bigger players, reducing their costs as much as possible. However, much like most small businesses in any industry, the small cloud providers will be able to best differentiate themselves on service. Offering a much more personal and intimate relationship can be a huge difference maker to the right clients. This is important to realize as an MSP because clients may be willing to pay a bit more, for that small company, personal feel. Especially clients that will potentially need more help and guidance in their cloud usage moving forward, a smaller provider may be a perfect fit.

How do you tend to find the differences between small and larger cloud providers? Is there a future for those outside of the “giant” category? Be sure to share your thoughts in the comments.

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