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The IBM Amazon Missing Link

By John | December 17, 2007

Is there a missing link between IBM and Amazon? Let me hold that thought for a few minutes. Over the past year, Amazon has been making some very subtle plays into a game that has been dominated by IBM. Amazon’s Web Services (AWS) provides online, extremely low cost storage (S3) as well as utility computing (EC2) at ten cents per hour.

Last week, Amazon also announced SimpleDB, a low-end relational data source based on the EC2/S3 services. The three services (AWS) provided by Amazon now allow a small- to medium-sized business (SMB) to get started at a very low cost along with providing an SMB with a completely virtual environment. IBM has recently announced the similar “Blue Cloud” services coming in 2008. Within the last week, a lot of comparisons have been made between IBM and Amazon regarding things like SimpleDB vs. DB2. SimpleDB is not going to replace Oracle or DB2 anytime soon. My spin on this, however, is that Amazon is not trying to compete with IBM and that IBM is being too arrogant to understand the disruption that Amazon is causing. Another key differentiator between Amazon and IBM is that IBM historically follows a “not invented here” model, and, IMHO, IBM will continue to do so with its “Blue Cloud.” On the other hand, Amazon is providing a completely non-customer facing model with AWS. It is proving almost all of AWS as API’s services to business partners and letting the business partners sell the services to their own customers. IBM will probably try to do everything itself and go directly to the customers. Can you say OS/2? James Governer hits it right on the head when he says..

“I have to say it makes me chuckle that executives at both IBM and SAP have been lately dismissive of Amazon’s innovation in the space when I talked to them. “Oh its just a MYSQL database on a server rack”… we’ll see.”

This quotation is from his recent Redmonk post “It would be hard to convince me Amazon needs IBM.” IBM might be looking in the wrong places for it next big rival. Or not, which brings me back to my initial question: Is there a missing link between IBM and Amazon? Maybe IBM wins either way…

See…

Does IBM Have a Toll Booth on the Internet?

Topics: amazon, cloud computing, ec2, enterprise, ibm, s3 | 2 Comments »

2 Responses to “The IBM Amazon Missing Link”

  1. Jay Says:
    December 17th, 2007 at 9:59 pm

    John,
    As I mentioned in my comment to James’ post I have to believe that there’s some missing link, though I think it has to include Yahoo & Google in there somehow too.

    However, I disagree with you that IBM will attempt another OS2. You suggest “IBM will probably try to do everything themselves and go directly to the customers.” however, IBM’s not traditionally good with the class of customers that Amazon’s catering too, i.e. really_small and small business.

    IBM’s philosophy will probably be the belief that they can be “the man behind the man who’s supporting the man”. In other words, Amazon can support the end customer and IBM will attempt to position themselves as the enabler with Amazon.

    As you mentioned there’s some overlap between Amazon and Google, and don’t forget that IBM and Google are “partners” in the Cloud Computing initiative, see; http://www.businessweek.com/magazine/content/07_52/b4064048925836.htm?campaign_id=rss_tech

    Of course it’s really written as Google’s show with IBM as, the man behind the man…

    But you’re right to point out that “Blue Cloud” is different then the Business Week article…

    Looks like there’s a lot of storm fronts afloat with all these clouds.

  2. John Says:
    December 18th, 2007 at 12:52 pm

    Jay,

    “they can be “the man behind the man who’s supporting the man”.”

    I like that. IBM is such a dichotomy. They are a company that has virtually defined operating systems, relational database technology, and even put binary switches on electrons. Then they turn around and produce OS/2 and almost kill DB2. IMHO, the only time they partner well is when they plan on buying a company. The Goolge gig will could turn into another Microsoft. I think IBM is back to the pre-Lou era where they make 5-10 year decisions and they are not reacting to the current sign posts. Heck what do I know? You are right it will be really fun to watch next year and either way I think the consumer will benefit.

    Thanks for commenting on my blog.

    John

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