amazon-cloudIn last week’s newsletter, I wrote about the future of a global IT industry dominated by Apple, Amazon, Google, Facebook and Microsoft.

This week’s newsletter continues that thread, but takes it in a slightly different direction. According to a new study by Synergy Research Group (SRG), there are only a handful of real competitors in the enterprise cloud market: Amazon, Microsoft, IBM, Google, Alibaba, Oracle, Salesforce and Rackspace.    

The good news is the market for cloud services is growing steadily. Annual growth is in the 40 percent range, according to SRG. Despite competition from other large tech firms, Amazon Web Services (AWS) continues to gain market share. 

“Microsoft, Google and Alibaba are all growing their revenues much more rapidly than Amazon,” according to SRG data from the third quarter. “But the reality is that in this market Amazon remains bigger than its next five largest competitors combined.”

I’m certainly glad to see that Amazon is facing stiff challenges from other significant tech companies. But the idea of one vast enterprise holding so much power and influence over an increasingly critical resource raises valid concerns. 

What happens if Amazon decides to raise prices or limit usage? It would be easy to think that you could easily switch to one of Amazon’s competitors, but switching horses in midstream isn’t easy, especially when mission-critical data is involved.

Today’s cloud isn’t just a place you send your data. For many companies, the cloud equates to IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service). The cloud is a lot more than remote storage – for some companies, it’s become a virtual replacement for the traditional IT shop.  

Reflect on that for a moment. Several years ago, we were all talking about the risks associated with sending our data into the cloud. Now we’re talking about the risks of sending everything into the cloud! 

As I mentioned last week, with great power comes great responsibility. Are any of those firms willing to take responsibility for the potential consequences of their power? 

It’s absolutely essential to remember that size and scale do not guarantee long-term success in volatile competitive markets. And it would be foolish to blithely assume that everything will be okay if we cede control of the cloud to a small group of tech giants. 

From our perspective here at HMG Strategy, the best roadmap for success is creating a culture of genius within your own organization. It’s far better to lead, reimagine and reinvent than to accept the status quo. Nothing is set is stone – especially not the cloud.