Infrastructure as a Service is based on the technology of provisioning virtual server, storage, and networks to support business computing needs. Currently, Amazon is the market leader with over 75% market share. Other strong competitors who are vying for market share is Rackspace and Verizon today. Google initial entry to the IaaS market segment is promising with its competitive pricing and its support of short term intensive processing needs, but need to add features to compete with Amazon. The strength of Google in order to complete with Amazon is based on their resources and the understanding to drive an IaaS solution. The market challenge is to address security concerns and non-disruptive availability to avoid any downtime.
Data Analytics is a technology based on analyzing/processing extremely large amounts datasets and try to identify patterns and trends. it poses significant opportunities to financial institutions and health care providers to make sense of all the data collected. It is fore casted to become a $15b industry by 2015 which is has the potential for significant revenue. The data Analytics market segment is still continuing to mature and it's pricing strategy continues to be challenging due to the various implementation (hardware, cloud solutions).
Looking at the market segment and Google's opportunity, it's threat from Amazon is a concern as it's current share is over 75%. The IaaS market segment will continue to mature as standards and customer needs change which will provide an opportunity for Google to become a dominating player in this rapidilly expanding market.
This is another interesting approach to a SWOT that I had not considered, so kudos for this. I do have a question, given that Amazon is 75% of the IaaS market, how does acquisition help Google? Why blow cash on grabbing companies and "good will" when they could probably grow it out organically? I ask because I had not considered acquisition as a strategy so I am curious.
ReplyDeleteI am glad you pointed out cloud computing as an opportunity. I had not thought of it, but with the way cloud services have blown up in recent times I agree it could be a great opportunity.
ReplyDeleteMy thoughts around acquisitions are that Infrastructure-as-a-service is still a maturing industry and has segments which Google may not be the most experienced (Security for example). It would make more sense for Google to acquire a company versus spending the capital and try and grow this organically. It could also provide an opportunity to accelerate it’s product refresh cycle to enhance specific features. I do understand that majority of acquisitions do not add the value expected (if any) and are viewed negatively. I do believe when a complimentary technology can be acquired, it does add value and can mitigate the capital needed to pursue such a technology (innovation). A good example is EMC Corporation (my current employer) who been able to grow significantly through the acquisitions of such companies as VMware, RSA, Isilon, and Data Domain. Outside of VMware, these companies were complimentary which allowed EMC to grow significantly.
ReplyDeleteExcellent explanation for why acquisitions could be beneficial. I am now in full agreement, as I had not considered acquiring complimentary services and merely considered buying out upstart competitors.
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