When Your Cloud Platform Becomes Your Competition

Grazed from Smart Data Collective. Author: Paul Barsch.

As more companies turn to cloud computing, social media and online selling platforms to avoid spending budgets on infrastructure, it is also likely that they are sharing a key business enabler—behavioral data. So what happens when your cloud-based provider shifts from providing infrastructure or a platform for your business to actually competing with you?

Online business Zynga understands while they develop games such as Farmville, Mafia Wars and others that run on Facebook’s platform, it’s also not far-fetched that Facebook could get into the profitable business of gaming. In fact, Zynga is turning away (though not completely) from Facebook to also support games for Google plus and other social/mobile platforms…

That’s also because there’s nothing that prohibits Facebook from doing exactly what Zynga does – making great games. As a Forbes article points out while the relationship between Facebook and Zynga is currently symbiotic, “There are many things Facebook could do to damage Zynga’s business such as limiting the Facebook access of game developers, modifying Facebook’s terms of service, giving more favorable treatment to Zynga’s rivals and building Facebook’s own games.”

The same is true for businesses that operate using Amazon.com’s infrastructure for warehousing and shipping. A Financial Times article cites Amazon.com as offering sellers access to a marketplace of 173 million people. However, the article also mentions “the downsides include giving Amazon direct access to these customers for information and communication and the potential for conflicts of interest.”…

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