Amazon Case

In terms of asset, we don’t believe Amazon has the competitive advantage to maintain the leadership position in the long term based on the following aspects:

1. The cloud maturity of enterprise customers

As the industry matured, cloud computing is becoming a core component of the corporate IT landscape. Businesses are also moving more complex IT workloads to the cloud. In the early days of cloud technology, companies bought raw IT capacity applications. Now they are more likely to buy comprehensive, cloud-based applications, or even complete business processes. While Amazon’s advantage stems from the consumer and developer community, competitors like Microsoft already has a long established brand as a technology company, a pool of enterprise customers, and large sale forces. As enterprise customers start to transition their IT to cloud, they favor incremental changes over massive architectural shifts. Therefore, Amazon’s lack of the established relationship and reliable reputation within the business users’ community, along with its limited hybrid cloud options, makes it less attractive to some big corporation customers.

2. The cloud’s changing formations

As the industry matured and grew, more suppliers have entered the markets, security measures have improved and prices have fallen. As a result, adoption of cloud services accelerated (Per a study by Goldman Sachs, cloud IT spending will grow by 30% on a compounded annual growth rate basis between 2013 and 2018, against 5% for IT spending overall). The range of IT tasks and business processes suitable for the cloud has broadened significantly. Users are using a wider range of commercial models for the cloud including public cloud, private cloud, community cloud, and hybrid cloud. Although Amazon dominates public cloud infrastructure, other players have built up significant beachheads, particularly in hybrid cloud and software-as-a-service (SaaS).

3. Infrastructure costs and capital adequacy

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