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

Rob Enderle | Nov. 25, 2013
CIO.com 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.

This transition is painful, and often deadly, because trying to be IT's buddy after being the bane of its existence for so long doesn't go so well initially. IT sees you as you were, while the user customers who made you successful suddenly feel betrayed. You also have to learn compliance, licensing, discounting and how to protect folks who make stupid decisions (that's politics). So you bleed customers at one end and lack the skills for the new ones you're trying to win at the other end - and they really don't trust you.

Now think of Amazon Web Services. How often does it (and other firms like it) come up in IT meetings as the problem to overcome? And isn't one of the key benefits of AWS that users can go around IT to use it?

Once we label a firm as a problem, it takes a long time to shed that label. Microsoft has had a long string of consumer product failures, starting with Zune. Like IBM before it, Microsoft clearly didn't get users anymore. What was the Zune's killer feature? Secure file sharing between two Zune owners who both had Zune music subscriptions. At its core: Compliance, an IT concept. At the iPod's core: The ability to get music regardless of its source, even if it was stolen.

Essentially, Apple was the Rebel Alliance; Microsoft was the Empire. You can't serve both masters effectively. If you try, as Anakin Skywalker did, you're simply screwed.

... But Xbox Shows That It's Not Impossible

Microsoft did succeed, though, when its Xbox took on the Sony PlayStation. Granted, Sony's mistake was building a game system that was priced out of the market, but the Xbox still gained a following and eventually led the market. Xbox got there because Microsoft launched a well-funded, arm's-length effort to go after gaming, and the folks Microsoft picked to do it were allowed to execute as if they worked for a separate company.

So a firm can do both enterprise and consumer tech. But you have to firewall off the fledgling effort - and, I'd argue, operate it under its own brand so there's no confusion about what the parent brand stands for. Car companies do this more than most; their professional brands carry professional messaging, while their consumer brands are about design, safety and status.

Here's something to noodle on over the weekend: When you look at the new Xbox One, which was created after the group was re-integrated with the rest of Microsoft, do you see the Rebel group that created the Xbox, all fired up and rabidly gamer-focused, or do you see the Empire and the Zune, all about subscriptions and assuring content revenues? Remember, Xbox One is $100 more than PlayStation 4.

 

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