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Vertical integration as a cloud competitive weapon

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When will the cloud providers begin acquiring product companies in order to keep the technology out of the hands of their competition?

Is that a strategy worth pursuing?

Many clouds are using open source technology to power their solutions, but I assume many of them have reliance on commercial products as well.  Could one cloud get an upper hand over the others by bringing a leading edge commercial product in house, integrating it tightly into one’s own cloud, and then end-of-lifeing the commercial version?

If you believe that the winners of the cloud game will be won by those firms with the greatest ability to control and continually shrink OPEX then maybe it is worth for big cloud players to bid against the typical acquirers of typical infrastructure technology (MSFT, Symantec, etc) in order to keep that technology out of the hands of the other clouds.

Are there any commercial products that are so clearly differentiated and powerful that they’d be worth a cloud provider paying up to acquire?

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Written by John Gannon

June 26, 2009 at 4:23 pm

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