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Enterprise cloud services dominance by Amazon could be good for CIOs

This week, Searchlight considers whether an Amazon-ruled enterprise cloud services space could be good. Also: handling big data, VDI benefits and more.

Amazon is going to do to enterprise cloud companies exactly what it did to bookstores. The headline on this week's lead Searchlight item did its job catching my attention. I've had my, let's call them issues, with Amazon. I sure don't like what it did to bookstores. And yet, there's an argument to be made that running roughshod over markets might not be such a bad thing when it comes to enterprise cloud services -- especially for CIOs.

Karen GoulartKaren Goulart

As writer Christopher Mims pointed out, Amazon cloud is cheap and has managed to keep getting cheaper. Its low price and agility make it hugely popular with startups, smaller companies and even some traditional companies like Ticketmaster. This can translate into a big win for CIOs at more established enterprises. With so many programmers being weaned on Amazon enterprise cloud, it stands to reason that the market will be full of workers with cloud computing skills when established businesses start to become more interested in Amazon cloud, Mims said. One of the biggest complaints coming from IT leaders, as we know at SearchCIO, is the lack of workers skilled in cloud computing. A bumper crop of programmers skilled in a common cloud service could be a boon.

But while Amazon enterprise cloud services may be cheap, they've also suffered some pretty infamous outages, and that doesn't sound like a very good tradeoff for enterprise CIOs charged with keeping every light blazing. However, as Mims pointed out, Amazon's investment in improvements is substantial as is its investment in moving up the value chain with new enhancements.

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I've already witnessed giddy CIO anticipation regarding Amazon's Redshift data warehousing service and I'm admittedly intrigued myself with Amazon Web Services' CloudHSM corporate-grade compliance and security offering. I've watched enough Breaking Bad to know how this works: hook folks with something cheap and easy and they'll be knocking down your door for the really good stuff. It's typical disruptor behavior, as Harvard Business School professor Clayton Christensen described in The Innovator's Dilemma: an unexpected player comes to market with an idea, product or service that is typically inferior but cheaper and available to a large population. Eventually it's perfected and draws more and more customers from the middle, displacing market leaders. Sound familiar?

Where enterprise cloud users may run into trouble is if Amazon becomes the only game in town. Talk about vendor lock-in. So while Amazon's dominance could be a win for CIOs in the short term -- CIOs should be ready to rise up and start making demands on Amazon's competitors, if only to ensure Amazon continues investing in those improvements.

Let us know what you think about the story; email Karen Goulart, features writer.

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