Analyzing the Enterprise Cloud Computing Market The majority of Google and Microsoft's existing business models are predicated on dependency factors that preclude their profitable scalability into the enterprise. The large-scale adoption of cloud computing in enterprises is inevitable as the high costs of on premise systems and their relative maintenance costs force many enterprises to evaluate how they can drastically reduce operating costs (Boillat, Legner, 2013)
This unique capability of building latent semantic indexing (LSI) queries of very large data sets is particularly valuable for large-scale enterprises who often have decades of data that is for the most part unused, delivering few if any valuable insights. Google's enterprise cloud computing strategy is focused on these global needs of large-scale organizations, with the intent of creating comprehensive contextual search systems that can be quickly delivered over their cloud computing architecture, powered by Google AppEngine, their collection of cloud services (Boye, Sejersen, 2009)
For purposes of this analysis, enterprise accounts are defined as those companies who are members of the Fortune 500. Like Microsoft, Google has aspirations of selling into the enterprise, both with value-added services and also with search appliances (Brynko, 2012)
Strategic Challenges Facing Each Firm in Growing Enterprise Cloud Computing Sales Both firms face significant challenges in retaining and strengthening the agility and quickness that initially led to their success. The dynamics of the Innovator's dilemma (Christensen, Magney, 1999) are very active in the cloud computing industry, with enterprise software being ready for change at the most fundamental economic level of business models (Boillat, Legner, 2013)
For Microsoft to confront and overcome this challenge, they will need to move beyond reliance on server-based components that are sold across the spectrum of companies in the mind-tier of the market. Microsoft's channel and partner sales organization is considered one of the best in the industry and has already begun the transition to cloud-based solution and application selling (Cox, 2013)
For Microsoft, the most efficient path through the challenges they face is to create a stronger analytics platform that can be deployed via their Azure cloud platform. Cloud-based analytics have the potential to revolutionize the enterprise, and to date no single large-scale vendor is dominating this area (Dejaeger, Broucke, Eerola, et
Despite these shortcomings in the enterprise market, Google has an extensive cloud platform and services of services collectively called Google AppEngine (Michel, 2009). What differentiates AppEngine from the many other cloud platforms in existence today including Amazon Web Services is the integration to knowledge management, contextual search, support for taxonomy creation and maintenance for enterprises, and most valuable of all, tight integration to the Google Android operating system that is dominating mobile devices today (Fenz, 2012)
Google and Microsoft however have traditionally generated the majority of their revenues and profits from mid-tier and small & medium businesses (SMBs) (Microsoft Investor Relations, 2014), and in the case of Google, consumer-driven advertising and advanced ad targeting (Google Investor Relations, 2014). Google's dominance of the worldwide browser market with Chrome began with the initial release of that application (Fontana, 2008) and continues today (Google Investor Relations, 2014) which further shows their expertise in B2C markets
Google AppEngine is the foundation for the company's enterprise cloud computing strategies while at Microsoft, they are relying on their Azure cloud computing operating systems and complex of data centers globally. Both companies compete with each other on a very regular basis to gain enterprise accounts who want to gain the cost, time-to-market and Return on Investment (ROI) advantages of cloud computing in their global enterprises (Han, 2011)
This is evidenced by the relative slow sales of their hardware servers that optimized contextual search for enterprise clients, and the relatively slow sales of their contextual search taxonomy services (Google Investor Relations, 2014). Despite these shortcomings in the enterprise market, Google has an extensive cloud platform and services of services collectively called Google AppEngine (Michel, 2009)
Google's enterprise cloud computing strategy is focused on these global needs of large-scale organizations, with the intent of creating comprehensive contextual search systems that can be quickly delivered over their cloud computing architecture, powered by Google AppEngine, their collection of cloud services (Boye, Sejersen, 2009). Google's direction in the enterprise is predicated on making these specific services, cloud, and appliance strategies all synchronize to the common goal of providing a scalable, secure and highly contextual knowledge engine custom-built for global enterprises (Moore, 2006)
Paradoxically the infrastructures both have built make them more vulnerable than ever to the emerging class of competitors who when categorized into Porter's Five Forces Model (Porter, 1980) are proving to be more effective at accelerating innovation and providing more compelling substitutes for the core products and services of these large corporations. For Microsoft, the threat of new entrants has been real since 2007 when the advent of open source software made it clear that the global software leader's lock on enterprise licenses would erode over time (Orr, 2007a)
Paradoxically the infrastructures both have built make them more vulnerable than ever to the emerging class of competitors who when categorized into Porter's Five Forces Model (Porter, 1980) are proving to be more effective at accelerating innovation and providing more compelling substitutes for the core products and services of these large corporations. For Microsoft, the threat of new entrants has been real since 2007 when the advent of open source software made it clear that the global software leader's lock on enterprise licenses would erode over time (Orr, 2007a)
With so much at stake in the enterprise cloud computing market, Google is aligning all of its core technologies, cloud services and most advanced research & development (R&D) in this area (Google Investor Relations, 2014). The result is a strong foundation for providing enterprises with an exceptional level of visibility across their entire value chains, which is a key success factor and buying criterion for Chief Information Officers (CIOs) (Perez, 2005)
Both of these companies and their rapid ascent to market dominance are predicated on very broad, rapid adoption of their respective applications, services and technologies. Paradoxically the infrastructures both have built make them more vulnerable than ever to the emerging class of competitors who when categorized into Porter's Five Forces Model (Porter, 1980) are proving to be more effective at accelerating innovation and providing more compelling substitutes for the core products and services of these large corporations
For Microsoft, the threat of new entrants has been real since 2007 when the advent of open source software made it clear that the global software leader's lock on enterprise licenses would erode over time (Orr, 2007a). Since then, Microsoft has seen open source dominate their enterprise accounts and move into the mid-tier account base as well (Wonglimpiyarat, 2012)
It encompasses directing the differentiation and/or cost leadership on a limited scope. The notion is for the company to be noticeable within a particular market division (Griffin, 2015)
How would its competitive strategy differ in each? Industry structures differ, and dissimilar structures have different inferences for the strength of and force in rivalry. On one hand, a fragmented industry is made up of a huge number of small sized or medium-sized companies, and none of them all are in a position to determine the prevailing price of the industry (Hill et al
Discuss whether AB Electrolux can compete with local Chinese consumer manufacturers VRIO framework is a tool that was developed by Barney, J. B in the year 1999, which can be employed to analyze and examine the internal resources and competencies of a firm to determine whether they can be a source of sustained competitive advantage (Jurevicius, 2013)
Discuss which of these would work best for Electrolux Porter's generic strategies is a structure employed to outline four different strategic options that an organization can undertake, if it wishes to attain a sustainable competitive advantage. These four strategies include: cost leadership strategy, focus strategy, differentiation strategy and the integrated cost leadership-differentiation strategy (Porter, 1985)