Recently, news broke describing Microsoft’s cloud implementation, Azure, as having surpassed Amazon’s AWS cloud services, complete with links to a survey that justified the title. And as the old Monty Python skit described, “there was much rejoicing”, at least within the Redmond zip code.
But this is not new. Surveys have been rolling in from analyst groups all over the industry, proclaiming the superiority of somebody’s cloud implementation, backed by some kind of objective data. It’s a bewildering time for the prospective cloud consumer, and it often leaves the IT department of large corporations (not to mention the plucky startup looking to become large enough to have an IT department) a little confused as to what, exactly, it all means.
Fortunately, it’s relatively easy to understand what’s going on in the cloud industry right now, if we step back and take a much larger strategic view. Ignoring the surveys and the marketing claims, a few notable trends emerge:
- The industry is made up of a few “principal players”, and a number of smaller, niche players. Microsoft’s Azure, Amazon’s AWS, and Google’s Google Cloud Platform (GCP) clearly form the top-tier cloud providers, with fourth place quite a distance away.
- The principal players are starting to release less mainstream features that duplicate the other players’ features. Compute, storage, network, these are all areas that are essentially “done”, with relatively little exception. Instead, much of the innovation is happening in other areas – big data, AI, and more.
- The principal players keep making pricing changes. Nearly every six to nine months, one of the principals makes a rate adjustment to their pricing scheme, and it prompts a similar move from the other two.
These three elements combine to highlight a growing trend that doesn’t appear to be changing any time soon: the developer-facing cloud is turning into a commodity good.
When vendors start competing on price, it’s a sign that they’re finding it difficult to compete on features anymore.
When vendors start competing as commodity goods, several new trends begin to emerge:
- Vendors start looking for ways to lock in. Even if the lock in is artificial, vendors look for ways to create that differential. Consider, for example, airline frequent-flyer programs, which serve no other purpose than to reward loyal customers with currency that is useless outside that airline. Some of this has already been in place hidden inside the pricing schemes, such as charging nothing to store data, but charging on a per-unit basis to pull data in or out. What’s most telling is when it’s far cheaper to pull data in than it is to get that data back out.
- Vendors continue to look for ways to differentiate. If the industry has shown us anything, it’s that technology – particularly software – is extremely fluid. One vendor’s “innovative feature” quickly becomes table stakes for every other vendor. Again, think of airlines and the check-in kiosk. For the first vendor, that was innovative; by the time the third airline adopted it, it was now expected of all of them.
- Everybody starts to look to elevate the discussion. Vendors, and the market, start looking for ways to “grow beyond” the basic commodity, usually by trying to find ways to change the game by offering products or services that better address the market. Consider, for example, how the food industry has evolved–rather than buying flour, sugar, and others in bulk, shoppers can now find packages containing all those ingredients in a box (cake mix, pancake mix, or …), already measured and simply requiring some manual labor to produce the same product.
Within the cloud world, that latter step is happening with the growth of “X-as-a-service” offerings that address a higher-level abstraction scheme than just “platform” or “infrastructure”.
While Microsoft, Amazon and Google fight to become the backplane for the Internet of the next generation, other vendors have started to build new value-add services on top of the cloud, to provide a new set of functionality that doesn’t fall into commodity scenarios. Fellow Bellevue residents Auth0 offer “authentication-as-a-service”, and prismic.io provides “content-as-a-service”.
In fact, Smartsheet fits squarely into this latter layer, offering not just “data as a service”, but “data, prepared and measured, sliced and diced, ready to consume or adjust” as a service. By virtue of the spreadsheet metaphor, combined with our growing platform, we enable companies to tap into this new developer cloud. Data stored, secured, edited, manipulated (thanks to spreadsheet formulae), linked, and reported…
… all in a box, ready to go. Just add data, and serve.
