Strategic and competitive analysis of the cloud computing value chain

Abstract

Cloud Computing is the latest disruptive paradigm to have entered the IT landscape. With the increased proliferation of IT (Information Technology) and broadband internet, even in the developing countries, the potential for cloud computing seems to be limitless. Computing (storage and processing power) as an utility to be made available on tap where the user pays only for what they use may sound like the stuff of science fiction but all this is being made possible at this very moment. Whenever an industry arrives at an inflection point, confusion abounds. In this case, the confusion is around several areas: Is cloud computing a new technology or is it old wine in a new bottle ?. Are the promised benefits real or is it just hype? Is cloud computing for everyone or does it benefit only the small enterprise?. Who are the various players in the cloud computing value chain and what are the roles they play?. What can be expected in the evolving world of the cloud and what are the challenges which are keeping it from realizing its promised potential? These are some of the issues we have tried to address in the following report. We have studied the cloud computing paradigm from multiple aspects and have investigated various sub-components such as service models, deployment models, pricing models and the overall value chain, among many others. Based on our primary research, we have further studied each element of the value chain from a strategic viewpoint and have tried to explore different aspects like the kind of revenue model used, the key success factors and the major challenges that exist in each segment. We have incorporated an Indian element by speaking with various Indian cloud computing industry leaders and senior management of Indian start-up companies. Finally, we have presented our conclusion and viewpoint about the future of the cloud computing industry and the extent of integration and consolidation that is likely to occur among the multitude of companies, big and small, that are currently operating in the cloud computing environment.