From the Computer Utility to Cloud Computing - To the Cloud: Big Data in a Turbulent World - page 61

broadcasters to add web advertisers to the brand advertising that built
the industry. Broadcasters now capture only $10 billion of the $60 billion
spent annually on direct marketing. But the shift to Internet television
has the potential to enable broadcasters to expand that share and enter
new markets. So while it is likely that there is some hyperbole in the state-
ment by a CBS researcher that this will usher in “a new golden age of
network television,” it does indicate that “legacy” companies like NBC,
CBS, and ABC will have something to say about the emerging consumer
cloud cartel (ibid.).
Three of the most important challengers to Amazon and other major
players in the cloud should be familiar to anyone who has purchased a
computer or printer over the last twenty years: IBM, HP, and Dell. These
companies hope to proit by building on their established base in data
processing and storage to provide services to cloud customers and by serv-
ing other cloud-computing companies. It should come as no surprise that
IBM is involved in the cloud; the company has had its ingerprints on just
about every device associated with the history of computing. In addition
to the standard business of hosting providers offering applications over the
Internet, IBM is well on its way to, in the words of one analyst, “becom-
ing a sort of arms provider for the cloud, selling customized hardware
and software that helps governments, large and mid-sized companies, or
Web developers” (Ante 2012). The company is involved in every facet of
cloud services, but in 2012 it made a major move to promote its cloud to
mid-sized businesses, which meant taking on market leaders AWS and
Salesforce. The company was initially successful, posting double-digit
gains in its cloud business. However, as with other irms whose history
of providing software and other IT services preceded the development
of cloud computing, success in the cloud may come at the expense of
its core business. This major risk was captured in continuing revenue
declines in IBM's Global Services unit and in software sales. The problem
for companies like IBM, as well as for HP, Dell, and Microsoft, is that
cloud services can cannibalize their own key businesses, including sell-
ing software and offering consulting services to help companies run their
own IT-linked supply chains. With more and more of IT bumped to the
cloud, companies are less likely to require software and services that main-
tain their own individual IT silos. According to one investment analyst,
“We could be seeing the tip of the iceberg on an important delationary