Demand for cloud-based services and delivery platforms has grown exponentially worldwide in the last few years, and Australia is no exception. According to Telsyte’s Australian Infrastructure and Cloud Computing Market Study 2015, the value of public cloud infrastructure services is predicted to more than double from $366m in 2015 to $775m by 2019.
The demands of innovative Australian start-ups, app developers, content providers and established software vendors have all played a part in the growing success of cloud technology. This band of old and new have turned to the cloud in unison for the same reason – seeking a cost-effective, scalable platform on which to build services and delivery mechanisms.
From this solid foundation of cloud infrastructure, we’re seeing that the rise of cloud platforms are driving traditional competitors to collaborate. The age-old rivalries between companies operating in the same space is no longer enough to keep collaboration at bay – it pays to tear down walls and embrace the Open Innovation movement. If ever there was a sign that the technology world is becoming more effective, then arch rivals sharing the same cloud platform would be it.
Take, for example, the high-profile music streaming service Spotify. Growing from its initial beginnings in 2008 as a start-up in Sweden, the service today has more than 75 million active users across over 50 countries. It’s serving over 30 million tracks to those users, delivering content via a range of web interfaces, dedicated mobile and desktop apps as well as embedded appliances such as smart TVs and streaming boxes.
Given the significant amount of scalability, flexibility and resilience it takes to ensure it meets the ‘always-on’ expectation of users and to cope with spikes in demand, Spotify recently chose the Google Cloud Platform to host some of its infrastructure. Doing so is interesting in that Google has its own music streaming service, Google Play Music that competes with Spotify. Nonetheless, the appeal of a cost-effective, scalable and reliable shared services platform can trump competitive considerations for both sides. In fact, Google executives are predicting that by the end of this decade revenues from its Cloud operations could surpass revenues from advertising on its search engine.
Amazon Web Services (AWS) is also ushering big-name clients through the door, having been chosen by the likes of movie streaming service Netflix to power its operations. As with Spotify and Google Play Music, Netflix is the primary rival of Amazon Prime Video, yet the two businesses will effectively share the same cloud-based infrastructure.
AWS is also proving to be a popular choice with Australian businesses, being one of only 12 regions in the world where the company has a physical presence. Their arrival in 2012 marked a significant uptake in cloud technology among some of Australia’s most recognised brands: Rio Tinto, Australia Post and Bunnings are all AWS customers.
In the days before shared cloud infrastructures, enterprises sought permanence in everything they did. Now, they seek how best to effectively complete a project or an iteration of a product or service, and move on to the next one. Being unencumbered with legacy hardware and even certain departments when you can instead depend on collaboration is now the prime mission of the best and most forward-looking companies, and using existing cloud space opens up room for an organisation to become more effective, fast, responsive and profitable.
Remember the days when outsourcing was a cure-all for a global corporation’s problems? The idea was that a company could hire a number of outsourcing specialists to oversee tasks and actually have them bid against each other in order to keep costs to a minimum. But then an interesting thing then happened: The Open Innovation movement suggested that a corporation would be better off if it were to seek to create platforms of engagement in which organisations of all kinds – established vendors, new market entrants, and even the competing outsourcers of old – could collaborate and find ways to contribute to making the enterprise more effective.
Traditional banks have been quick to roll out their own platforms, spurred on by the cloud-based collaborative model. A recent report by Infosys found that established banks can be exceptionally good at rolling out new APIs and apps that are just as agile as those from younger members of the Open Source community. In Australia, all of the big four, ANZ, CBA, NAB and Westpac have all invested heavily in cloud based services to improve customer and employee experience.
Emboldened by their new platforms, banks are reinventing themselves as technology organisations. They are even shedding physical form such as branch networks and paying-in books in favour of an app-centric, cloud-hosted existence – industry superfund-owned bank, ME, who operate almost entirely online and over the phone, are a perfect example. Banks already have robust middleware that support their APIs and are adept at building strong partner ecosystems. They have been building multi-party platforms for generations, today’s cloud environment need not be any different.
By no means have traditional corporate rivalries waned. But they are now using each other’s talents and products on innovative platforms that not only serve as conduits to collaboration, but also as new ways to disrupt markets and compete against each other.
About the author
Ganapathy Subramanian, VP & Solutions Head – Platforms at Infosys, a global provider of technology-driven business solutions.