From the Computer Utility to Cloud Computing - To the Cloud: Big Data in a Turbulent World - page 57

of them will struggle to hang in through the days of low or no cloud
computing proits—and many of them will have to toss in the towel or
have the towel tossed in for them.” 2 The only long-term upside is for the
largest providers: “Once the smaller providers are pushed out, you can
begin to raise your prices. Hmm, it sounds suspiciously like a page from
the big-box stores' playbook—and a warning for cloud adopters not to
count on low, low prices as the norm” (Linthicum 2012).
One of the keys to creating and maintaining market control is to exercise
power up and down the chain of production. A handful of companies are
doing this in one direction through price cuts and in another direction
through their relationships with key IT producers—particularly the giant
in this market, Intel, the world's largest and most highly valued semicon-
ductor producer. Intel worries that the hardware world it dominated, led
by the venerable PC, is in decline. According to one analyst, “Intel still
has a lot of dough, but their old world is cracking” (Hardy 2013f). As a
result, the company is especially concerned with pleasing what it refers
to as the Big Four: Google, Microsoft, Amazon, and Facebook (Apple
purchases its chips mainly from Samsung) not only because of their size
but also because they lead a critical and growing market. Intel has been
losing revenue in the personal-computer market that made it a historic
leader. The $25.8 billion it earned from its PC client group in 2012 remains
enormous, but that igure represents a decline of 2.25 percent from the
irst three quarters of the previous year, largely because of the shift to
tablets and smartphones from standard personal computers and laptops.
On the other hand, the company's revenue shot up by 6.7 percent in its
data-center business, where it earned $7.9 billion. That has triggered a
serious makeover at the company, which now views itself as more of a cloud-
computing company than a client-server business (Hardy 2013f, 2013g).
The head of Intel's data-center group realizes that the company has to
change direction, but believes that if it does so successfully, it could boost
data-center revenues to $20 billion by 2016. But in order to accomplish
this, Intel needs to listen and at times take direction from large, inluential
companies, something it is not used to doing. As Intel's data-center direc-
tor described the situation, “The Big Four operate at a very different beat
rate, and they are very tech savvy, so they don't want a lot of input. They all
get a dedicated salesperson, the same as the others in our Top 40 custom-
ers, but there is a lot more direct innovation from them, and a lot of sharing