Data Hosting: A competitive Market or a “Blue Ocean”?

Computer data has become essential to the proper functioning of all businesses and data loss is one of their greatest fears. Therefore, all means are implemented to avoid this type of disaster. It is this strategic priority which is the very basis of IT hosting.

This is how the data hosting market came into existence. Responding to a growing need, many companies have decided to put their infrastructures and their quality of expertise to the benefit of other structures by allowing them to outsource their hosting operations in protected data centers.

Since data hosting has developed well, we had fun wondering if we could consider it a hyper-competitive market or a blue ocean?

And after looking into the subject, all we can say is that the answer is not as simple as it seems, let’s explain:

Blue ocean and red ocean: the concept

Some may wonder what the difference is between a “blue ocean” and a “red ocean”. Others may simply have never heard of this concept. A reminder therefore seems obvious:

In the table below, the two scenarios are contrasted:

On the one hand, the red ocean which can be described as a hyper-competitive market: This is the case for most companies which establish themselves in an already existing market. Indeed, they will have to face their competitors to dominate them by making the best use of existing demand and by adapting their offer to a strategy of differentiation or domination by costs… companies are fighting for their survival and the blood of the vanquished comes to stain the ocean of red.

On the other, the blue ocean, the perfect example of which is that of a company which establishes itself in a virgin market to put its competitors out of the game by creating new demand and adapting its offer to a strategy of differentiation and high prices. It is, in a way, an ideal world, free from the struggle between companies in a pristine and therefore blue ocean.

Data hosting : a competitive market

As explained in the introduction, the business outlook for data hosts is more than encouraging. The exponential importance of computer data and therefore its storage and a trend which pushes companies to outsource their IT infrastructure.

Faced with the dynamism of this market, many companies have positioned themselves to meet this growing demand.

Alongside this, a multitude of smaller local players continue to emerge to participate in the battle for market share, further promoting competitive intensity.

And while some players take advantage of this to continue to grow, others pay the price and see themselves swept away by the bloody waves of the red ocean.

These have been the consequences of the rapid development of data hosting on its market and on the resulting competitive game.

However, let’s remain optimistic, because if the red ocean can be compared to a dangerous environment, we are not forced to stay in these waters. Indeed, the possibility of wandering towards the blue ocean does exist!

Changing oceans: It’s possible!

Changing oceans is a possibility, but above all it is a choice. It is not a question of us identifying the blue ocean as a perfect or ideal environment. Indeed, some companies will be much more competent in an existing market facing fierce competition than in a virgin market without competitors. However, changing oceans is one of the most suitable solutions when the weight of competition begins to become too heavy for the company’s shoulders.

We can then identify different stages:

• Make the decision to change Ocean: Logical but essential, as explained above, changing Ocean is not a formality but a strategic choice which must be clearly thought out to adopt the right course of action.
• Questioning the current model: Indeed, it will not only be necessary to adjust its current offering in relation to that of the competition but to really shake up its activity by clearly differentiating itself or imagining a new development model.
• Take action: Finally, the most important and often the most complicated point, make a firm decision and take the plunge. Moving from a red ocean to a blue ocean means changing its environment, the issues and its offering. A way of redistributing the cards that can pay off, but facing the unknown can sometimes scare businesses.

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