Cloud Computing

“Amazon is just a webshop!” – “Europe needs bigger balls!”

This year I had the honor to host the CEO Couch of the Open-Xchange Summit 2013. This is a format were Top CEOs are confronted with provocative questions on a specific topic and had to answer to the point. Among the guests on the couch were Herrmann-Josef Lamberti (EADS), Dr. Marten Schoenherr (Deutsche Telekom Laboratories), Herbert Bockers (Dimension Data) and Rafael Laguna (Open-Xchange). This year’s main topic was cloud computing and how German and European provider to assert oneself against the alleged overwhelming competition from the US. I’ve picked out two statements mentioned during the CEO Couch, I would like to discuss critically.

Amazon is just a webshop!

One statement has got me worry lines. One the hand VMware already had underlined that it seemingly underestimates its supposed biggest competitors, on the other hand its absolutely wrong. To call Amazon today still a webshop one must close its eyes very wide and hide about 90% of the company. Amazon is today more than just a webshop. Amazon is a technology company respectively provider. Rafael has illustrated this very well during his keynote. There are currently three vendor who have managed to set up their own closed ecosystem of the web services over the content to the devices. These include Google, Apple and Amazon.

Besides the webshop further technology and services belong to the company. Including the Amazon Web Services, content distribution for digital books, music, movies (LoveFilm, Amazon Instant Video), ebook reader Kindle and Kindle Fire (with an own Android version), the search engines, Alexa Internet and the movie database IMDb.

Above that, if you take a look at how Jeff Bezos leads Amazon (e.g. Kindle strategy; sell at cost price; sales over content), he focuses on the long-term growth and market share, rather than to achieve quick profits.

Who wants to get a good impression of Jeff Bezos’ mindset, I recommend the Fireside Chat with Werner Vogels during the 2012 AWS re: Invent. The 40 minutes are worth it.

Europe needs bigger balls!

The couch completely agreed. Although Europe has the potential and the companies to technically and innovative play its role in the cloud – apart from privacy issues, compared to the United States we eat humble pie, or better expressed: “Europe needs bigger balls!”. That depends on the one hand with the capital that investors in the U.S. are willing to invest, on the other hand, to the mentality to take risks, to fail and to think big and long term. At this point, European entrepreneurs and investors in particular can learn from Jeff Bezos. It’s about the long-term success, not about the short term money.

This is in my opinion one of the reasons why we will never see a European company that, for example, is able to hold a candle to the Amazon Web Services (AWS). The potential candidates like T-Systems, Orange and other major ICT providers that have data centers, infrastructure, personnel and necessary knowledge, rather focus on the target customers they have always served – the corporate customers. However, the public cloud and AWS similar services for startups and developers are completely neglected. On one side this is alright since cloud offerings on enterprise level and virtual private or hosted private cloud solutions are required to meet the needs of enterprise customers. On the other hand, nobody should be surprised that AWS currently has the most market share and is seen as an innovation machine. The existing ICT providers are not willing to change their current business or to expand it with new models to address another attractive audiences.

However, as it also my friend Ben Kepes well described, Amazon is currently quite popular and by far the market leader in the cloud. But there is still enough room for other provider in the market who can offer use cases and workloads that Amazon can not serve. Or because the customers simply decide against the use of AWS, since it’s too complicated, too costly or too expensive for them, or is simply inconsistent with legal issues.

So Europe, put on bigger eggs! Sufficient potential exists. Finally, providers such as T-Systems, Greenqloud, UpCloud, Dimension Data, CloudSigma or ProfitBricks have competitive offerings. Marten Schoenherr told me that he and his startup process of developing a Chromebook without Chrome. However, I have a feeling that Rafael and Open-Xchange (OX App Suite) have a finger in the pie.