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Posted by Jennifer Belissent, Ph.D. on March 26, 2010
Hello from Dubai! I arrived a few days ago for customer visits across the region including UAE, Qatar and Bahrain. Although I’ve traveled extensively, this is my first trip to the Middle East.
As a frequent flyer (both in terms of travel and airline loyalty), I looked first to my preferred airlines when I booked my flights to the region. Neither of them (yes, I fly two airlines regularly which suggests that I’m not all that loyal) provided service to my destinations. So, I looked for a partner airline – one that is part of my preferred airlines’ networks. I went with Emirates which not only serves the Gulf States I was planning to visit, but enabled me to stay within network and collect my frequent flier miles. Why do I mention this? Well, I have been thinking about that model of a “Star Alliance” or a “Skyteam,” and how it could apply to service providers of other kinds.
About a week ago I got a call from a Forrester client who had read my report on cloud computing and the locations of the capacity. This particular client was looking for a cloud provider who offered capacity in several regions. Specifically, they were looking for capacity in the UK, South Africa, India, Saudi Arabia, Sweden, and Australia. We spoke about some of the global cloud providers: IBM, HP EDS, Fujitsu – but none of them could serve all of the local markets my client was interested in -- at least not with local capacity. Each of these providers does have data centers in multiple countries but they don’t currently partner to serve markets where they have no presence. From my client's perspective, it wasn’t possible to single source his capacity needs with in-country resources. Unfortunately, I wasn’t much help at the time as I wasn’t familiar with local cloud providers in all of the markets of interest. However, I am more knowledgeable now thanks to my current trip.
When in Qatar a few days ago I met with MEEZA, a local cloud services provider. They provide data center co-location and managed services as well as software-as-a-service offerings primarily to the Qatari market. In all of the Gulf States, there are small cloud providers developing the markets for on-demand infrastructure and software services. The telecom operators are looking into it but the early movers are smaller companies: MEEZA in Qatar, Injazat in Abu Dhabi, and eHosting DataFort in Dubai are a few.
During the conversation with MEEZA, I asked about the question my client had posed about local service providers. My thought was: when the big players have a client that wants capacity in Qatar, who will they call? This got me thinking. If airlines can create networks of partners and “code-share” flights operated by these partners, why can’t cloud services providers do the same thing? Where’s the “cloud alliance” or the “cloud team?” The model is simple: Create a partner network to provide services locally where customers need them – and many of them do need local services in order to comply with local regulation.
When I posed the question to the folks at MEEZA, they agreed but indicated that price negotiation had been an obstacle. Costs were different – broadband is cheaper in Europe but energy more expensive; whereas here energy is cheap and broadband expensive. As they saw it, price differences made it difficult to partner.
But, why do partners have to agree on price if they are serving different markets? In the case of the airlines, the price of the same flight purchased from two different code-sharing airlines is often different: a Delta ticket from San Francisco to Paris is priced differently than the Air France ticket, even though in this case it is exactly the same flight. The price differences reflect differentiated supply and demand factors for the two airlines.
In the case of the cloud, a customer could and would pay differentiated prices across different markets. Price isn’t the issue. The customers want a single source, ideally similar infrastructure, common admin consoles, etc. As a loyal “cloud team” member, they would look for a provider who is part of their network. Imagine how much easier that would be when expanding into a new market and looking for a provider.
Some vendors have started partnering but I have yet to see a program like the airlines which brings together airlines that serve specific local markets. I predict that “frequent computer” or “computing rewards” programs will be the next clouds to form on the horizon. What do you think?
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