Guest Column | April 22, 2016

The Cloud Wars May No Longer Focus On Price

By Rick Delgado, contributing writer

Study: CFOs Fear Falling Behind From Not Having The Right Cloud Solutions

The cloud wars are an ongoing battle for supremacy of cloud services. The competition is fierce and intense, as can be assumed regarding what is a multi-billion dollar market. Cloud providers come in many varieties, but the most popular are names known to most people and businesses out there. The likes of Amazon, Google, Microsoft, and IBM all have products and services to offer and, for many years, much of the focus has been on slashing prices whenever or wherever possible.

Often referred to as the cloud price wars, cloud vendors have made a habit of offering lower prices in an effort to undercut their competitors. Many have thought those battles would simply continue, but a noticeable shift has taken place. Now, the cloud wars aren’t so much about what price providers can give for their services but rather what types of features each service can offer. It’s this shift that could fuel some innovative cloud solutions for years to come.

Much of the cloud price wars have been punctuated by the so called race to zero. This involves cloud vendors continually offering more storage and services at lower prices. Many experts predicted the result would be cloud offerings given away for free, at least for a time, in an effort to lock up enterprise clients for the foreseeable future.

It doesn’t take long to see how this approach is unsustainable and indeed, it had the effect of pushing many of the smaller cloud vendors out of the market entirely. The larger companies, like Amazon and Google, could keep up with the price slashing due to their huge number of resources and financial support from other divisions. In this sense, the price battles had the intended effect of whittling down the competition by significant measures, but low price points don’t pack the same punch they used to. Cloud services have simply become more affordable than ever before, and prospective clients are looking for more than the price tag.

That’s where the features wars have come along, though sadly the name doesn’t have the same ring to it. Even so, it remains a crucial aspect of the cloud wars, one that looks to define it for the next decade. This can best be seen in the acquisitions many of the larger cloud providers have made of software firms and other startups. Amazon Web Services (AWS), for example, recently acquired Italian software company NICE with the goal being to improve Amazon’s already considerable computing capabilities. That added boost goes beyond price and instead may be enough to attract businesses that were still on the fence about adopting AWS as their primary cloud provider.

That’s only one example of a vendor trying to add to their cloud features repertoire. Other cloud providers have features they’re willing to show off. Microsoft wants to leverage its connection with larger enterprises to give specific services they’re asking for. The company’s Office 365 product is certainly a selling point. Google has its Google Apps for Work designed specifically for smaller businesses to use. IBM is working on a hybrid cloud strategy. These features are intended to help these providers to stand out from their rivals.

In essence, the battle of features is all about differentiating oneself from every other company. Does Amazon provide better Infrastructure-as-a-Service? What about Microsoft’s cloud products? Is Google really the company to use for smaller organizations? Each provider has a particular emphasis in its cloud strategy, but features go beyond products. Many cloud vendors will also laud their tech support, a particularly important subject when businesses place vital apps on the cloud. Data access and security are also important features vendors will discuss. A cloud provider with innovative products likely won’t get very far if their security is lacking.

Cloud prices have plummeted to the point where the differences between most cloud providers are negligible. To stand out, vendors have needed to concentrate their efforts on the features they have on hand. This has only started happening recently, but it will likely pick up steam during the rest of the year and beyond. In much the same way software defined storage vendors are competing by offering better services and products, cloud providers are turning to their unique qualities to attract attention and entice more buyers. It’s a big shift within the ongoing cloud wars, one that’s sure to lead to greater innovation in the future.