Overcome the structural barriers erected by the cloud providers

A new way to sell software in to the cloud

Ofer Bengal
© Shutterstock / behindlens

In the early days, the cloud providers offered a few basic data services of their own and created marketplaces where independent software vendors (ISVs) could offer additional cloud services. Today, those marketplaces feature hundreds and hundreds of data services.

Before the cloud era, when IT was installed and managed on-premises, it was enterprises’ responsibility to deploy and maintain sophisticated software systems such as databases in their data centres.

That was a big, complex job. Servers can go down. The amount of data can grow, and you may need to cluster multiple servers. All that was handled by database administrators (DBAs) and eventually operations and DevOps teams, who worked for the enterprise.

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When the cloud started, it initially provided infrastructure only (primarily compute and storage servers), but soon added data services, which are basically automated versions of the activities that DBAs, DevOps, and operations teams once performed.

In the early days, the cloud providers offered a few basic data services of their own and created marketplaces where independent software vendors (ISVs) could offer additional cloud services. Today, those marketplaces feature hundreds and hundreds of data services.

As the cloud industry matured, cloud providers developed advanced versions of the most popular data services in the market, including emerging data models, and offered them in the form of a Database-as-a-Service (DBaaS). On top of that, cloud providers used their power to offer discounts for committing to spend a certain amount with them—typically excluding ISV offerings in the marketplaces.

This creates a conundrum for enterprise buyers. Cloud provider service offerings can lower costs and help buyers streamline and unify procurement processes. But these built-in services may not be best of breed and finding and using alternatives in the marketplace typically involves more friction than using the cloud providers’ own options.

Buyers’ decisions to go with the cloud provider’s own offerings has a dramatic negative effect on third-party ISVs offering their services in the cloud provider’s marketplace. This can be a live-or-die question.

So, what can these third-party ISVs do to compete? The obvious solution is to offer a better service than what’s available from cloud providers. Now, not every ISV is able to do that, but some can. There are better solutions out there.

But even companies with a significantly better offering may not always be able to completely overcome the structural barriers erected by the cloud providers. That’s one reason many ISVs choose to partner with the cloud providers — demonstrating to them that offering strong third-party software can increase their own market share. That’s the approach that Redis Labs has taken with Microsoft Azure and Google Cloud.

The challenge for ISVs is to create a strong enough differentiation between their product and what the cloud providers offer to create an incentive for them to partner.

For database vendors, that means adding unique value-add capabilities like Active-Active Geo Distribution, on top of core capabilities like unlimited scaling and high availability. Active-Active—the ability to deploy a database in multiple geographic locations, read and write in each one independently, and keep them all synced—is in great demand by enterprises, and is available with Redis Enterprise.

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With their virtually unlimited resources, cloud providers can theoretically develop almost any capability, but it may require major product architectural changes, and it may take a long time. In the meantime, ISVs like Redis Labs can create the next competitive advantage. This reality presents cloud providers with an incentive to partner.

Finally, it’s important to highlight the importance of hybrid and multi-cloud deployments. Many enterprises want to deploy their IT systems beyond a single cloud. So being able to support on-premises, hybrid, and multi-cloud environments can be another way for third-party software providers to bring value to enterprise customers beyond what the cloud providers offer. By building better software and software powered by unique, in-demand technology, ISVs can attract enterprise buyers and show the cloud providers that partnerships can be mutually beneficial.


Ofer Bengal

Ofer is a serial entrepreneur who has founded and led several companies in the areas of data communications, telecommunications, Internet, homeland security and medical devices. Ofer was founder & CEO of RIT Technologies (NASDAQ: RITT), a provider of sophisticated telecommunications and data communications systems to major world carriers. He began his career as an aerospace engineer in the Israeli Air Force and then built his own aerospace engineering consulting firm. As a hobby, he has also invented, developed and licensed toy concepts to companies such as Milton Bradley, Hasbro and Tomy.


Ofer holds a Bachelor of Science (cum laude) in aerospace engineering from the Technion, Israel Institute of Technology.

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