A lack of scalability will prevent niche cloud services from being sustainable, according to Microsoft's cloud tech chief.
Mark Russinovich, chief technology officer at Microsoft Azure, said in an interview with V3 at the 2014 IP Expo that, while there is a space for niche cloud providers in today's IT market, they will not survive in the long term.
This is due to the way major cloud services, such as Microsoft Azure, Google Compute Engine and Amazon Web Services, can offer similar services but with the potential to scale up as client businesses grow.
"Give me one example of some niche capability or service that one of these guys are going to offer that won't be offered by us sooner or later," he asked rhetorically, citing how the scale and scope of Microsoft's cloud platform can offer business of all sizes a wide range of services to meet their needs.
Russinovich added that, if small and niche cloud firms cannot scale and widen the number of locations they can cover, companies will be less inclined to pay for their services.
"If they're going to make a strategic bet on a cloud provider, first of all they're going to need to know if it's going to be around in 10 years," he said.
"When you look at these niche players it becomes a very risky proposition. Somebody's going to gamble their business on a niche player being around [in the future]."
He added that the small size and capacity of niche companies prevents them delivering services that span many locations, which erodes their appeal to any companies with global ambitions.
While Russinovich claimed that while there is no monopoly in the market, he sees Microsoft, Amazon and Google as the dominant players.
As such, V3 asked Russinovich how Microsoft plans to differentiate itself in the cloud market from Amazon and Google.
"An ecosystem on top of [the cloud]. A platform is nothing without an ecosystem on top of it," declared Russinovich, who explained that Microsoft will create an app ecosystem on Azure with products such as Office 365, not dissimilar to Apple's iOS mobile operating system and App Store ecosystem.
With Microsoft pushing cloud-powered Office tools such as the recently revealed Delve app, it is clear that the company is already making moves to develop its vision of a cloud-based ecosystem.
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