Opportunity on the fringes of a price war

I suppose like myself we are all bored of hearing about the “race to the bottom” for cloud pricing. It is like walking around a traders market with all the stalls selling the same product. The only difference is price, and how loud the traders shout for your attention.

Step away from this loud aggressive marketing, ignore the cutting and look around. Guess what? Our traders market is full of customers using smartphones, tablets and laptops. These devices are running applications. We rely on these applications.

Next find 10 people in your office (even better if they have no interest in IT) and ask them if they care about the IaaS layer or the costs saved by its use? You will probably get a bemused look.

If they are still paying attention ask the same 10 people if they care about how the applications they are using work. Ask are those applications simple, efficient enough to deliver value for the tasks required? Where you had blank expressions before you will certainly have strongly voiced opinions now.

As the cloud price war delivers greater value for the expenditure it is squeezing the market leaving only a select, monolithic providers.

The next generation of users wants powerful simplicity. They want beautiful designed interfaces that allow them to be productive. So where does this story take us so far? We all need a clear and specific goal. Without one, pricing is as unimportant as the features and benefits promised.

Managed service providers (MSPs) are beginning to understand this. And, working with independent software vendors (ISVs), they are starting to see a window of opportunity beneath the price war.

Businesses like consumers need to have clear ultimate goal. And the application of this goal has got to be simple. Everyone really wants support out the box, easy installation and an interaction that supports productivity. The “whatever” as a service cloud is delivering for a business has got to be a service that is useful and aligned with the goal.

My personal view is that we are heading into a world of fewer choices. As the cloud price war delivers greater value for the expenditure it is squeezing the market leaving only a select, monolithic providers.

Scale, processing power, geographic distance and connectivity are so hugely important in delivering a cloud product that providers have to be a global sized businesses just to compete. Only the big traders can offer the kind of price discounts that the marketplace is seeing now.

But in all this frenetic activity of discounting there are still opportunities to be had. While Amazon is always going to be able to undercut Dropbox on its own AWS, the fact Dropbox exists demonstrates opportunity beneath the giants.

ISVs are targeting users with features and productivity tools that are missing from our new, mobile device-led lives. For example, here at the Compare the Cloud we have been trying Wunderlist and Todoist in the battle for task management. Apart from the obvious reasons, why do we need task management? Because, not naming names, our cloud-based productivity suite doesn’t deliver a complete, out-of-the-box, experience that is useful.

Beneath price is quality and customer need – what the end-user really requires to get the job done. Working together MSPs and ISVs can benefit from the price war margins. The slightly disappointing application experience of IaaS layers sold in our traders market is fuelling opportunity.

Cost cutting headlines aside, the race to the bottom is at least helping to create a new, burgeoning eco-system of mobile and application developers and niche service providers.

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