• Home
  • /
  • Gaining Altitude in the Cloud

Love Thy Enemy to Float in the Cloud | Gaining Altitude in the Cloud

Many nations celebrate Friendship Day on the first Sunday in August, with citizens spending time together, exchanging gifts, cards, and wristbands to proclaim their friendship to each other. And when Oracle, an organization that trashed cloud earlier, partners with bête noire Microsoft, Salesforce.com, and NetSuite, and when Microsoft extends olive branch to its rival Engine Yard, and adds its platform to Windows Azure marketplace, it’s a clear sign that technology company “frenemies” have inaugurated their own variant of Friendship Day a little in advance of the official date.

These newfound friendships are testimony to the fact that the market for cloud services is driving these companies to bury their hatchets and think about computing in a totally different way. While money, (e.g., Oracle’s poor performance in selling new software licenses, Microsoft’s issues in traditional software sales,) is one of the key drivers, these technology providers now also realize the disruption in the competitive landscape, and appreciate, accept, and are evolving along with the changes in the market dynamics and requirements.

As an example, consider that Salesforce.com always ran on an Oracle database. Although it investigated competing open source technologies, (e.g., NoSQL,) it is now committed to Oracle’s hardware and middleware, perhaps moving away from commodity infrastructure. Similarly, Oracle is partnering with NetSuite to target the mid-market and ensure that its Fusion human capital management (HCM) works with NetSuite’s ERP. If they enter into a distribution agreement, Salesforce.com and NetSuite may get access to Oracle’s direct sales channel, resulting in interesting competitive dynamics.

Further, as cloud adoption grows more pervasive and complex, partnerships are emerging to provide buyers with the requisite ecosystem to enable enterprise computing with cloud DNA. For example, Microsoft is partnering with Engine Yard in an acknowledgement that developers need more capabilities and require application and infrastructure abstraction to work across multiple clouds. While many may view these strange bedfellow affiliations as an indication of large technology companies’ inability to compete with nimbler players, Everest Group believes this is a positive development that enables enterprise buyers to leverage the best of the cloud delivery models.

Yet, when competitors become partners and it becomes fashionable to be frenemies, should buyers worry about collusion? To guard against possible challenges, every buyer needs to ask itself and its technology providers:

  1. How does a partnership with an erstwhile competitor change the product lifecycle, commitment, and roadmap?
  2. Should I be wary of a “tacit understanding” between these newfound partners that impacts my ability to buy the best business solution?
  3. Does this affiliation give technology providers a perverse incentive to unofficially agree not to rock the boat of enterprise computing?
  4. Does this partnership dent technology providers’ capability to innovate to stay ahead of the competition? If yes, then how does this lack of innovation affect my technology landscape?

On the surface, everything may look great as vendors pitch broader solutions citing partnerships. But enterprise buyers need to have laser precision vision – and more than a sprinkling of clairvoyance – on their business objectives in segregating the high pitch, (and sometimes false,) marketing spiel of the provider community.

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.