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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.

AWS, IBM Should Target Each Other's Core Businesses

In the end, if Amazon wants to go after enterprise business, it should buy or create an arm's-length company structured so it won't critically damage the business Amazon already has. If IBM wants to go after Amazon's core business, it should do the same - and to that end there's a relatively large number of affordable companies IBM could purchase.

The key to making this work is assuring that the efforts remain at arm's length but maintain adequate funding for success. Remember, too, that imitation is the sincerest form of flattery: Samsung copied Apple, then spent three times as much to market its products (and went to court to defend them). This kind of fight isn't cheap.

Right now, Amazon is going after IBM's business, but it's not using an arm's-length strategy, and the result should therefore be predictably bad. It amazes me how many companies enter markets and battles firms despite being ill-prepared and underfunded.

If you want to win, emulate a winner. Don't omit the parts you don't want to do, such as funding and assuring focus. If you do, you'll fail - and that lesson goes well beyond the scope of this column.

Rob Enderle is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance and Security. Currently, Enderle writes on emerging technology, security and Linux for a variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.



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