Michael Porter’s five forces model gives a framework that models the global hybrid cloud market. The strategic business managers, trying to create an edge over competitive firms in the global hybrid cloud market can utilize this model to better comprehend the industry connection in which the firm operates. The components of each of the forces and the degree of impact of each component in the context of the global hybrid cloud market have been broken down and analyzed.
THREAT OF NEW ENTRANTS The threat of new entrants in the hybrid cloud market is considerably low as the capital requirement associated with the setup of hybrid cloud services is huge. Moreover, the key players in the hybrid cloud market have established their brand identity through their strong presence in the cloud computing market. Additionally, the monopoly of key players such as Microsoft Corporation, Amazon Web Services, and IBM Corporation makes the entry of new players in the hybrid cloud market difficult.
BARGAINING POWER OF SUPPLIERS The suppliers in the global hybrid cloud market include IT infrastructure and data center facility providers. The bargaining power of the suppliers in the hybrid cloud market remains moderate owing to the requirement of high capital associated with switching infrastructure and data center facility providers. However, the level of differentiation between the facility services offered is considerably low which lowers the bargaining power of suppliers making the overall bargaining power moderate.
THREAT OF SUBSTITUTES The threat of substitutes in the global hybrid cloud market is high due to the presence of a major substitute to hybrid cloud services in form of multi-cloud services. The multi-cloud service model allows organizations to sign up for public cloud services of multiple cloud vendors which eliminates the issue of vendor lock-in. Other benefits offered by multi-cloud service model include increased agility and scalability, reduction of costs and improved disaster recovery which are similar to those offered in the hybrid cloud service model. The buyer propensity towards this substitute is relatively moderate due to fairly recent introduction of this service model.
BARGAINING POWER OF BUYERS The buyers in the hybrid cloud market are large enterprises as well as small- and medium-sized enterprises in different industry verticals including BFSI, healthcare, retail, manufacturing, media & entertainment, transportation, and IT & telecom among others. The vendors are well-established in the hybrid cloud computing market with strong brand names. The number of buyers in the market is relatively high as compared to the hybrid cloud solution providers which increases the bargaining power of buyers. The cost involved in switching vendors is low and the process is relatively less complex compared to public cloud which further strengthens the bargaining power of buyers.
COMPETITIVE RIVALRY The rapid increase in the adoption of hybrid cloud services has increased the competitiveness of the hybrid cloud market. The key players in the hybrid cloud market undergo frequent developments and update their services in order to deliver best-in-class solutions based on the changing market needs. Rivalry among key players such as Amazon Web Services, Microsoft Corporation, and IBM Corporation is high due to continuous developments in the cloud computing technology and the high demand for the same.
