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Director, OpenShift Strategy at Red Hat. Founder of Rishidot Research, a research community focused on services world. His focus is on Platform Services, Infrastructure and the role of Open Source in the services era. Krish has been writing @ CloudAve from its inception and had also been part of GigaOm Pro Analyst Group. The opinions expressed here are his own and are neither representative of his employer, Red Hat, nor CloudAve, nor its sponsors.

3 responses to “Network Effects, Monopoly and Cloud Computing”

  1. Hutch Carpenter

    I was curious about Tim’s assertion that Oracle is missing the boat on the network effects benefit of cloud computing:

    “If Oracle isn’t playing that game, they will one day be doomed to irrelevance. Perhaps, like hardware giants of the past – Compaq, say – they will be absorbed by a bigger company. Or perhaps, like Unisys, they will linger on in specialized markets, too big to go away but no longer on the cutting edge of anything. Or they will understand that it’s not the database software that matters, but the data that it holds, and the services that can be built against that data.”

    I disagree that Oracle has the wrong approach. In the enterprise market, I don’t think companies are ready to put their databases in the cloud…and let third parties access the data or metadata about its usage to achieve network effect benefits. What benefit is there to the enterprise?

    Large companies’ size is one of their advantages – they see more about a market than do smaller players. If they participate in a platform where everyone benefits from their participation, arguably they’ve just given up on a competitive advantage.

    I don’t disagree about network effects with office apps (docs, spreadsheets, etc). But I don’t see any advantage to enterprises in letting third parties access their data to achieve network effects.

  2. Krishnan Subramanian

    @Hutch, true. Thatz my point too. Network effects don’t play a predominant role in IaaS and PaaS.