SWOT Analysis: Threats and Opportunities for Cloud Management Companies

Cloud management refers to the software and technologies made for monitoring and operating applications, services and in the cloud. The tools help to confirm that cloud computing-based resources are working properly. It is an important field and it is not easy. There can be many problems in cloud management processes. There can also be inefficiencies amid cloud computing company activities.

In order to address all these concerns and come to a conclusion, companies use SWOT analysis. SWOT is a very common tool for company managers. It helps to identify and overcome weaknesses and threats. It also assists to recognize and utilize strengths and opportunities of the firm. Strengths, Weaknesses, Opportunities, and Threats make up SWOT.

The companies have control over strengths and weaknesses. This is why the elements are known as internal factors. Opportunities and threats are external factors as firms have little or no control over them.

A regular SWOT analysis would look like this:

Strengths

• Experienced business units
• Great distribution and sales networks
• Low barriers to market entry
• High profitability and revenue

Weaknesses

• Future profitability
• Additional costs
• Tax structure

Opportunities

• Scope in global markets
• Emergence of new markets

Threats

• Rising costs
• Increase in rates of interest
• Growing competition and less profitability

While there are both internal and external factors affecting cloud management, in this article I will only focus on the external factors. I will explain in details how the opportunities and threats can impact cloud management activities.

Before we venture in the details of this topic, you must know that leading companies in the field include RightScale, Data Mines, and Scalr. Other direct or indirect competitors include enStratus, ScaleXtreme, Bitnami, and ComputeNext. However, Amazon’s AWS Management is something that all the other firms fear of.

RightScale claims to be the industry leader in Cloud Portfolio Management. It allows enterprises to hasten delivery of applications. Leading enterprises like Intercontinental Hotels Group, Pearson International, and PBS have launched millions of servers through RightScale since 2007.

Scalr was established in 2007, at the very beginning of the cloud computing revolution. With time, it is growing. Scalr is a mature and profitable business, which is here to stay.

Leading personalities in the field have stated that Amazon is the biggest threat facing other companies. It is the largest cloud player till now. AWS is solving certain major problems which many cloud management platforms such as SCALR and RightScale have set out to unravel. This includes the following issues:

• Increasing agility (cloud formation)
• Decreasing maintenance (amazon Linux, rds)
• Adjusting capacity (auto-scaling groups)

Cloud IaaS providers find a mutual platform to federate across their infrastructures without involvement from firms like RightScale and Scalr. This will endanger the direct business model of the cloud management companies as it will take over a part of their value proposition. It will also enable single cloud providers to compete with AWS. This can be made possible by broadening the product range horizontally and vertically. As AWS is after a huge part of Rightscale’s revenue, a true alternative to it could pose a threat to the business model.

When Cloud Management vendors question about opportunities, multi-cloud support is often mentioned. Many often state that the promise of being able to shift easily from one vendor to another as an opportunity. This is quite similar to buying milk.

The main flaw with this argument is that it needs all the vendors to provide same or similar functionality. A buyer would never switch from buying fresh milk to spoiled milk. Similarly, consumers will not shift from Amazon to a lesser cloud. Therefore, for this to become a really great opportunity, cloud management companies need to present themselves as viable alternatives.

Another opportunity for Rightscale and other companies would be to lower the entry barriers. This will give a wider range of IaaS/Cloud-hosters. This is not in their short-term interest at the moment. If they do not do it anytime soon, some other company will and that could become a long-term problem for the business model.

While these are the most commonly discussed topics, let’s see some other threats and opportunities that the cloud management companies such as Data Mines have.

Threats

• Cloud OEMs offers Auto scaling tools
• Cloud OEMs provide free tools for conversion or migration from competitive clouds
• Cloud OEMs provide Snapshot or Backup tools.
• Cloud providers are offering more advanced dashboards
• New companies are offering tools like RightScale but at a much lower prices
• More advances are being made in the hypervisors. This will make conversion or migration from a specific Cloud to a different Cloud seamless

Opportunities

• Unified dashboard experience
• Least-Cost-Routing equivalent: This refers to having a tool which can automatically deploy your cloud from 1 provider to another. This way, you can take advantage of the lower costs.
• Pre-defined management: This means having pre-bundled scripts and tasks
• 3rd party integration like Pingdom, backup companies, domain registrars and aicache
• Auto-scaling for beginners or newbies
• Mobile and iPad apps might be used control the cloud
• Administration scripts. For example, click this and a certain directory is zipped or click this and log files are rotated
• Can importing from other cloud management tools.
• Better traffic insights

Always remember that identifying the threats and opportunities is only the beginning. Your task is to eliminate the weakness. Also, try to take full advantage of the opportunity. Often, the aim is to make weaknesses into strengths. Cloud management companies should conduct SWOT after every few months.

The results vary with time as changes occur amid the company and industry. Pay close attention to the industry and not the SWOT factors.

Conducting SWOT analysis on cloud management companies is an important step. It should be done in the initial stage. Often, SWOT is conducted before designing strategies or taking important decisions.

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