Microsoft, Oracle and the merits and pitfalls of fast following for data centre operators

The way in which Microsoft and Oracle have responded, very differently, to the challenge posed by public cloud in general and AWS in particular offers real learnings for data centre operators faced with changing market dynamics, emerging technologies and new business models.

AWS has built an impressive market lead in public cloud provision which it is not going to lose anytime soon. This has enabled AWS to threaten the traditional enterprise IT market, forcing a response from the all the established vendors. Truly disruptive new technologies and business models don’t emerge every day. This means competitors often have to find defensive strategies to nullify the threat of the dominant player in the sector. Fast following is a genuine strategy that can deliver survival and success. How you embrace and implement a fast following strategy will determine the extent of its success.

Microsoft is, arguably, the master of fast following. It was slow to embrace the internet and the cloud yet it is prospering in both areas. They are able to say, with some conviction, we do what AWS does. They don’t spend a long time trying to dismiss AWS capabilities, or claim they do things that are AWS core competencies better than AWS. Rather, having minimised or nullified any perceived AWS advantage, they then focus their efforts on convincing their target audiences on what they do best and where they have inbuilt competitive advantage.

Oracle, on the other hand, seems intent on trying to convince the world that it has a better technical solution than AWS, that, coming late to the party, it has a second mover advantage. Quite apart from the fact that a second mover advantage only occurs if the first mover stumbles and gets it wrong, which AWS clearly hasn’t, whingeing that your technology should be more widely adopted because it is better than the market leader’s rarely works as a strategy. You just sound bitter and twisted.

In the Data Centre Operator world Equinix has a clear lead in the interconnection platform space with Digital Realty doing a fair impression of a fast follower. EdgeConnex looks as though it may well take the leadership space in provision of genuine Edge computing facilities, although they may lose the war about what Edge computing really means. Significant markets with clear leaders might yet emerge in modular data centres, in high density or green data centres. The point is, if you need to fast follow don’t waste time arguing that you do what you are following better than the leader. If you are clear about what you do well and differently, do enough to nullify their advantage. Make sure your data centre is connected enough, energy efficient enough, flexible enough to stop customers making these areas an issue. Then, importantly, stress the benefits of what you do differently to the right set of target customers at the right time.

For example, don’t argue that PUE is not an effective way of measuring energy efficiency because your competitor has a rating of 1.08 and yours is only 1.2. Don’t dismiss your competitor’s latency story by being dismissive about ease of physical access. Leave those debates to the analysts. The point is your PUE, latency and access will be good enough for most customers. Be positive. “And I do this very well” is so much better than “but they aren’t very good”. In the end, in the absence of a genuine disruptor it comes back to a laser focus on what you can do better than anyone else and what customers need that capability more than anything else.

This post first appeared on the old Cassini Reviews website.