A post from Barb Darrow over at GigaOm caught my eye this morning. In the post Barb suggests that we’ll see many more specific vertical clouds from AWS, akin to the GovCloud. As she wrote:

Here’s one I think the company will pursue, if it’s not doing it already. In the U.S., Amazon’s GovCloud is a separate region that complies with regulations above and beyond what other regions do so that federal, state and government agencies can use it. Given data privacy concerns in Europe and some other regions, it would be fruitful for Amazon to think about setting up analogous secure clouds outside the U.S

Barb’s post looks specifically at specific cloud for particular government applications – but if we take a step bake and look more broadly, we can see the direction that large cloud vendors will take in relation to an ongoing margin and commoditization pressure on their services. How will the incumbent vendors (AWS, Rackspace et al) counter this process?

Geographic Granularity

The first way is to start offering specific granular offerings. We’ve seen a rapid escalation in new regions being supported by these cloud vendors (of late Australia seems to be flavor of the month) and we’ll continue to see vendors build out zones at an ever increasing rate as they seek to provide a compelling answer to the data-location question that many customers have. This will be the first avenue of attack for IaaS vendors.

Stack Creation Granularity

We’ve already seen this move from a number of vendors – AWS continues to build out higher-stack functionality, Rackspace makes acquisitions that see them offer higher level services. More and more we’ll see compelling propositions from IaaS vendors that, while not called PaaS as such, start to build a PaaS-like offering on top of their infrastructure. The days of cloud infrastructure being merely about storage and compute are completely over, the future lies in an uber-flexible platform that allows teams to tailor specify their stack to their requirements – all through one vendor, one SLA and one billing relationship.

Use Case Granularity

There are times that location of data is only one of many specific requirements that customers have. In these situations we’ll see IaaS vendors build out specific ring-fenced solutions for particular clients (Governments, large health or financial organizations for example). In doing so they’ll attempt to provide the benefits they offer to less regulated industries, but in a way that meets the compliance requirements of heavily regulated industries or groups.


Three different approaches towards differentiation but all three will be targeted in different ways by the large infrastructure vendors. In the mean time the incumbents in any one of these particular areas (for example an incumbent hosting vendor in a specific location, an incumbent vendor providing specific FinSec solutions or whatever) will attempt to “cloudify” their operations to deliver the self-service, scalability and automation that cloud vendors deliver. Look to a host of startups providing services to these traditional vendors to gain prominence in the time ahead and traditional hosters need to invest in technologies that allow them to compete.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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