HP Does not See Amazon as a Threat
January 27, 2015
Amazon has gone way beyond selling books at near wholesale prices. The world’s largest retailer practically sells everything, including IT applications and cloud storage. Companies that deal strictly in the IT industry are wary of Amazon’s moves, but HP has something else to say according to ReadWrite: “HP Cloud Chief: We’re Not ‘Intimidated’ By Amazon’s Cloud.”
Cloud storage is still an untapped IT market, but Amazon Web Services is predicted to be the industry leader from market shares and “relentless economies of scale.” Stephen O’Grady of Redmonk says:
“The economies of scale that larger players can bring to bear on the markets they target are, quite frankly, daunting. Their variable costs decrease due to their ability to purchase in larger quantities; their fixed costs are amortized over a higher volume customer base; their relative efficiency can increase as scale drives automation and improved processes; their ability to attract and retain talent increases in proportion to the difficulty of the technical challenges imposed; and so on.”
Along with Amazon, Microsoft and Google will also benefit, but HP and IBM are supposed to benefit as well. HP and IBM are smaller companies and they only way they can compete is to offer something that makes them unique compared to the bigger companies.
HP believes it will see success by closely following Amazon and offering services that are compatible with it. HP does not want to be a rival; instead it wants to stand on its own, while working in tandem with the big giant. It sounds like it wants to remain as neutral as Switzerland.
HP’s cloud plan sounds reasonable, but you have to remember that HP also said they were going to make Autonomy a million dollar business.
Whitney Grace, January 27, 2014
Sponsored by ArnoldIT.com, developer of Augmentext
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