Terry Swaren

Compete and the same. Different and compete?

Blog Post created by Terry Swaren on Oct 6, 2016

During a recent dinner with a national retail giant, the conversation, like most these days turned to the cloud, specifically an offering from Amazon. I was intrigued by their take on the use of this particular service provider, because for them this cloud provider is a retail threat and competitor to their core business, to IT they are another solution provider. The conversation really left me wondering are they the same and compete, or are they different and compete?

 

Like most technology shops the demands on IT cannot always be met in a timely, cost effective manner, therefore the decision to migrate some workload to the cloud was made. The technology team performed their due diligence and made a recommendation to off load new application development and non-essential services to the cloud. From the mindset of the technologists their chosen cloud solution was the best choice, it met their needs and therefore became the recommendation. Unfortunately, the plan was cut short by the people in the offices upstairs, we all know these folks: offices with windows, real walls, a door, great hair, well dressed... (Okay, enough about me...) The decision from above was not to use a competitors’ services andto look elsewhere.

 

tumblr_inline_mmhyuwXooD1qz4rgp.jpgOkay, I get it. This particular cloud provider sells stuff, they have a supply chain (logistics) division and an IT business just like our fine retail example. But they do not have store fronts, real estate in the form of stores, a weekly flyer and people. People who I can rely on for advice and guidance as well as help locating the item I came in for. I would even argue that the goods offered by our cloud retailer differ from that of most retail outlets. Not to mention, I have to, prepare yourself, WAIT for it to be delivered?! (Where is my instant gratification?) I cannot wait for days to fix my leaking

toilet. I personally appreciate holding something, trying it on, looking at it (not just a picture), and taking it home. This is part of the great retail experience, at least that is what my wife tells me when she suggests she needed retail therapy. Enough about the experience, and back to my point...

 

Truthfully, I'm not sure the right questions were asked by the executives in the ivory tower before the decision was made. The question should have been similar to this: “We compete, but are we the same?” Sure there may be some level of retail competition, but having our IT services hosted with them doesn't necessarily mean we are paying our competitors bills. The “retail” component of each of these businesses may have similarities, but do they really compete? What I mean by this is let’s say your toilet is leaking do you grab your mobile device and look for the parts to repair it online, place your order, wait for the delivery and then repair your toilet. (for the non-DIY reader, please just call a plumber) Not likely, you likely get in the car and head to your local retail outlet for guidance and parts. I could certainly procure the products through an online channel, but in this instance the brick and mortar retailer is not competing with the online retailer, in my opinion. On the other hand, the retailer has an IT department, that has driven and supported initiatives for decades, this does not necessarily make the retailers IT department a public cloud provider. Could they venture out and be one, likely, would there be significant adoption from the enterprise, I’m not sure. To summarize, there may be similarities between these “retailers”, but they are not true competitors.

 

My intention is not to pick on Amazon, in fact it is quite the opposite, I applaud them for their innovation. There are many other examples, Uber, Turo, Airbnb, eBay, PayPal, Apple, Tesla.... Even our fine retailer here is an innovator, digitally transforming to the combat the disruption they are experiencing from both traditional retailers and the digital disruptors. They have and continue to developing their own online retail and new delivery model strategies to compete, to transform into a disruptor themselves.

 

Perhaps, the next trip I make will result in the purchase of public cloud service along with my plumbing supplies.

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