Cloud Computing Market Become Oligopoly of High-Volume VendorsPrepared By:

Muhammad Taimur Adil Taimur.adil93@gmail.com

What is 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. Large market is shared by small number of sellers.

Oligopoly vs. Monopoly

In Oligopoly market shared between more than one sellers More than one sellers are king of market Large amount of market power

In Monopoly market ruled by only one seller One is the king of market Complete market power

What is Cloud Computing ?

The practice of using a network of remote servers hosted on the Internet.

Used to store, manage, and process data, rather than a local server or a personal computer. Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS)

What is Cloud Computing ? (Contd.)

Data Centers containing number of Servers Different Geographical Location Providing services through fast internet

Storage Computation

Cloud Computing Marketplace

This marketplace becoming the domain of a few big vendors. Large players including Amazon, Microsoft, Google and IBM coming

online with similar types of services. This is an emergence of IT oligopoly

Cloud Computing Marketplace (contd.) “Emerging of few companies in cloud computing marketplace is both

an oligopoly and monopoly at the same time” Said by Owen Rogers With identical commercialized services. Only big vendors (that can deliver huge economies of scale with

margins) will survive in this space.

Cloud Computing Marketplace (contd.) Market resistance gives rise to new alliances, new companies,

and even new industries. No other can survive because he needs large investment to

build data center. Microsoft's $750 million data center investment in Wyoming Apple To Invest $2B Building Green Data Centers In Ireland And

Denmark

Estimated Cost to Build Data Center

Total cost to build data center containing 46,000 servers Variable Cost (Operational Cost)

$3.8 Million Fixed Cost (Capital + Energy + Equipment)

$167 Million Total Cost

$170.8 Million

Impact of Oligopoly

Alliance of cloud services with others Services Closed / Shut down

References

http://www.businessinsider.com/amazon-web-services-market-share-2014-6 http://www.forbes.com/sites/joemckendrick/2013/07/11/cloud-computing-mark

et-may-become-an-oligopoly-of-high-volume-vendors/

http://www.businessreviewaustralia.com/marketing/785/Are-we-Headed-for-a-Cloud-Oligopoly

http://images.google.com/ http://www.techrepublic.com/article/microsofts-750-million-data-center-invest

ment-in-wyoming/