Is There Room to Disrupt the Cloud Industry?

Is the Cloud industry already dominated or does it have room for disruption? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.

Answer by Steve Herrod, Managing Director at General Catalyst, Former CTO of VMWare, on Quora.

"Cloud" means different things to different people - in part thanks to the "cloud washing" that our industry is rife with (this author may be partly responsible for some of that. Sorry.) Just to set a foundation for discussion, the definition of "cloud" typically has two different axes:

  • Where is it running it? If a company runs their own cloud, it is referred to as "private". If a company accesses a cloud operated by someone else, it's referred to as "public". We've muddled these definitions even further with terms like hybrid, co-op, and "hosted private", but I won't go there at this point.
  • What does it offer? The abstraction offered by these clouds can be at multiple levels, but the three most common are Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).

In the US, most people talk about the "Big 4" public clouds - Amazon, Microsoft, IBM and Google. They're each taking a slightly different approach to cloud services, and collectively they own ~60% of the public IaaS/PaaS cloud market share. The scale and massive spending of the incumbents makes it very hard to compete on this turf.

That being said, there are all sorts of opportunities for new players to disrupt the scene. In the near-term, these will be:

  • Industry-specific clouds: especially where compliance is an issue or where unique access to industry-specific data or services is a competitive edge over more generic cloud services.
  • Country-specific clouds: Physical borders still matter on the internet, especially in more regulated industries. Data protection laws and government regulation create opportunities for some regional offerings.
  • Application-specific clouds: Whether it's a new SaaS offering or a platform for building some new type of application (e.g. an industrial IoT cloud), we'll continue to see new companies come along to compete with the big boys.

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