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BLOG: To beat IBM, Amazon Web Services needs to build the next Xbox

Rob Enderle | Nov. 25, 2013 columnist Rob Enderle isn't suggesting that Amazon get into gaming. Rather, AWS needs to approach IBM and the enterprise cloud the same way Microsoft successfully took on Sony. Otherwise, Amazon risks entering the annals of tech history alongside Lisa, Vaio and Zune.

The last two weeks I've talked about the battle between IBM and Amazon Web Services and how I believe IBM will beat AWS. The previous two pieces discuss turf and positioning, and how companies that try to move from where Amazon is to where IBM is either stall or go out of business.

Why can't user-focused companies do enterprise business, or enterprise companies do consumer? Apple's servers failed. IBM had to sell its unprofitable PC business, which is now the world's top PC maker. Cisco Systems' consumer business (which it purchased) nearly took the company out. EMC sold its consumer business. Sony's attempts at enterprise sales failed (along with a lot of other stuff). Netscape imploded when it tried to expand to the enterprise.

I've spent the most time watching Apple and Microsoft over the last decade. I was front and center for the Apple server and Microsoft Zune launches. I told both companies those products were dead at birth. Turns out I was right. I actually told the Zune guy he'd lose his job, and he did.

Let's talk about why companies can't seem to do both consumer and enterprise technology at once - and how you'd build a company that could do it. It is possible, but it takes a unique set of skills, and conviction, to pull it off.

Enterprise Tech Firms Making Consumer Goods Rarely Succeed ...

One of the earliest stories I heard about Bill Gates and Steve Ballmer, which folks inside both IBM and Microsoft at the time can confirm, recalls a trip to Armonk where they saw a bunch of employees working on IBM PCs that all ran 3270 emulators. There were expensive, slow-to-boot terminals and weren't really PCs at all. Young Gates and Ballmer realized that IBM just didn't get the whole PC revolution thing. (I can imagine Larry Page and Sergey Brin visiting Redmond in the mid-2000s and saying the same thing about Microsoft and mobile, though I doubt this ever happened.)

The irony is that both Microsoft and IBM achieved success by emulating Apple, which was, and remains, the most user-focused of the group. It's ironic because, when you focus on empowering the user, IT is an obstacle to overcome. Apple has had more success going around IT then it ever did trying to sell Lisa to IT departments.

In those examples, IBM and Microsoft lost track of PC and mobile users, respectively. Rather than helping users overcome IT, they switched to serving IT. From the user perspective, this would be like Luke Skywalker suddenly realizing he wants to be Darth Vader - which is why the new Star Wars movies were so bad).


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