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Why Amazon and Salesforce are pulling away from the Cloud Pack

GigaOM has an interesting article about why they think Amazon and Salesforce are blowing away the competition when it comes to cloud offerings.  Keep in mind that author James Urquhart is saying that these two are leaving companies like Google and Microsoft in the dust.  Here’s a couple quotes before my thoughts.

I almost feel silly calling out Amazon today, as today its dominance seems so obvious. But 18 months ago, while it was definitely the visionary among the IaaS offerings (as I noted in a follow-up post), it hadn’t really stepped into the era of offering services that competitors couldn’t match within 12 to 18 months (assuming those competitors had the vision to do so).

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What Salesforce is doing so well is combining the core functions of business and the social interactions with customers, partners, and within the organization itself. So, as work gets created, moves through the company, and results in deliverables and/or revenue, Salesforce can automate key elements, coordinate the human aspects, and measure and analyze it all.

James Urquhart goes on to say that he doesn’t believe it’s “game over” in the cloud.  I agree with him.  Of course, I also agree with him about Amazon and Salesforce.  We get queries on Amazon cloud all the time.  We see major vendors putting their products in images on Amazon.  Not to be outdone, even though they use a SaaS vs an IaaS approach, Saleforce’s wide range of offerings and wide range of supporting vendors make for quicker time to market.  One client chose them solely for that capability and they launched their site within thirty days.  So yes, both Amazon and Saleforce have both the capability and the mindshare right now.

On a side note, read the article but especially read the comments, there are a lot of well thought out responses to the article….

“So we’re still at the very, very beginning. We are in the first innings of Cloud Computing. This is still the Renaissance.” These are the words verbatim of Salesforce.com CEO, Marc Benioff. Then Jeff Bezos, Amazon.com CEO, said “We want to make money when people use our devices, not when they buy our devices.”

Just like CRM and AMZN have re-invented their respective companies into leaders in cloud with platform and services instead of only their original core products of Contacts Relationship Management and E-Commerce, the agility of companies (not just products) allows competition to catch-up quick these days……….

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Good article, thank you. It’s a little scary to think that just two companies could control this huge emerging industry, however there are two mitigating forces: 1) both companies throw a huge wake. The opportunities for startups to base their stack on AWS or Salesforce (or both) and therefore reach effective monetization with dramatically lower capital investment than was possible before, are creating a whole wave of exciting startups and disruptive innovation. 2) In both cases, the platforms create inclusive, partner-friendly ecosystems, as opposed to closed systems that favor only the mothership, not the developers and value add service providers.

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2 thoughts on “Why Amazon and Salesforce are pulling away from the Cloud Pack

  1. Justin

    Great analysis and summary.

    Speaking now of players looking to disrupt AMZN and CRM leadership – one has to wonder what SAP and ORCL will do to stay relevant in the dynamic landscape emerging.

    It will be interesting to see how ORCL does with its “private/public cloud” strategy as it appears that most the excitement and interest of the moment is centered around the dynamism within the public cloud space.

  2. Michael Porter Post author

    Yeah, I’m interested in what happens with Oracle’s cloud efforts. Cloud requires a different sales effort than the normal because it has a different value to the end user and different risks involved. Can SAP and Oracle move their sales force to sell it correctly and can they get marketing behind it. Both love to sell their legacy products (ERP and DB respectively) and their sales force can’t use cloud to drive those sales…..

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