16 July 2013 – Oligopoly: A market in which there are a limited number of providers providing the same service. Its political counterpart, oligarchy, means rule by a few.
So starts an article by Joe McKendrick which was published in Forbes magazine last week, leading off his review of a research note by Owen Rogers, senior analyst at 451 Research, who suggests the emergence of an IT oligopoly. It’s a brilliant research note and provides a great “cloudonomics” tutorial.
Is the cloud computing marketplace becoming the domain of a few big vendors? With large players including Amazon, Microsoft, Google and IBM coming online with similar types of services, we may be starting to see a consolidation of the primary cloud computing market into the hands of a few powerful vendors.
Actually, Owen’s report goes further to say what is emerging is both an oligopoly and monopoly at the same time. With identical services comes commoditization, and only big vendors that can deliver huge economies of scale with margins will survive in this space. He adds that perhaps the “oligopoly … Read more