I have read “the end of competitive advantage” by Rita Gunther, and the common pattern that I got from this one and others readings about the new way to do business: How fast companies success or fail , just in months you can be successful or mess up all your hard work. You have to avoid your core product or service to be turn commodity, and how do you know it’s happening? if one of your most important differentiator with the competition is price, I am sorry to say it has happened. Cloud IaaS is suffering this symptom for a long time, you only have to read what that every new site with such service is claiming in their home pages: “…cheaper alternatives are just as good as what you have to offer…”. Other important factor is when there is not potential growth or It requires continuous small changes to survive much longer.
Probably I am not telling anything new to you, this is part of the public utility concept that create this service to help companies to control IT resource costs, more than an attractive IT solution, we can say the appeal is on financial benefits. You remember something similar happened with email. this asynchronous communication service used to be a profitable product, It generated direct revenue for some providers, now you could get it for free with no worries about the capacity. Don’t you think that something equivalent is going to happen with IaaS? (Market Cap for some IaaS pretty known companies are falling fast these last months).