Startups take advantage of white space to storm the big three ‘cloud castles’

Three major companies — Amazon Web Services Inc., Microsoft Azure and Google Cloud Platform — dominate the cloud computing market. These are the “cloud castles,” impenetrable fortresses that control their cloud fiefdoms.

Or are they?

In a study that addresses the question of how to win in the cloud, Jerry Chen (pictured), partner at Greylock Partners, takes a look at how the big three built their “Castles in the Cloud” and how cloud native startups are challenging them.

“There are 500-plus services between all three cloud vendors, but there are 500-plus startups competing against the cloud vendors,” Chen said. These startups include almost a hundred successful unicorns that are disrupting their markets, he added.

Speaking with John Furrier, host of theCUBE, SiliconANGLE Media’s livestreaming studio, during the AWS Startup Showcase: New Breakthroughs in DevOps, Analytics and Cloud Management Tools event, Chen discussed Greylock’s “Castles in the Cloud,” an interactive project to map the cloud computing ecosystem, and explained why challenging the big three cloud providers may not be such a tough proposition for a startup. (* Disclosure below.)

The new modes of competitive advantage

Far from being locked up by Google, AWS and Azure, the cloud is a wide-open space for innovation, according to Chen. Figures published in “Castles in the Cloud” show that cloud services can be categorized into 31 markets based on functionalities and end-users, and within these markets are 173 further submarkets.

“There’s not one giant market like ‘databases;’ there’s a database market and 30 or 40 submarkets that serve the needs of developers,” Chen said. This is “great news” for developers, as cloud has reduced the cost and created something net new, while it has also opened up a lot of white space for startups to innovate within niche areas.

MongoDB Inc., Snowflake Inc., Databricks Inc. and HashiCorp Inc. are just a few of the unicorn startups that have taken advantage of this white space to “storm the castle” of the big three cloud providers, according to Chen.

Adding to the positive news for startups, when the walls of the castle are breached, it opens yet more opportunities for others to rush in.

“Snowflake has created a hole in that castle wall against Redshift,” Chen said.

This provided an opportunity for real-time analytics company and Startup Showcase participant Rockset Inc. to step into the space Snowflake created. While Snowflake has transformed the data warehouse market, it’s not fast enough for real-time analytics, according to Chen. It’s a gap Rockset is well-positioned to fill, he added.

“Even the big guys like Snowflake have created a wake behind them that created even more white space for guys like Rockset,” he said.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the AWS Startup Showcase: New Breakthroughs in DevOps, Analytics, and Cloud Management Tools event(* Disclosure: This event was sponsored by participating companies. Neither AWS nor sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: Jerry Chen

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