I think cloud providers are mostly good for small/medium, fast growing startups. Big companies need more granular flexibility.
The path to vertical integration in the software indsutry is a lot smoother than in many other industries, there are many levels:
You can...
1. Make your own hardware
2. Own/manage your own hardware
3. Rent commodity hardware from a standard hosting provider
4. Use IaaS (e.g. EC2)
5. Use PaaS (e.g. AppFog, Nodejitsu)
6. Use BaaS (e.g. Firebase, PubNub, Pusher.com)
The higher the level, the more technical flexibility you lose.
The bigger the company, the more it makes sense operate at a lower level because there is no significant wastage being introduced as you move down the levels (you remove the middlemen so you can pocket their profits) and the capital cost to move between levels is relatively low.
If you compare software to another industry like cheesemaking for example, if you're a cheesemaker and you want to make your own milk, the next step is to buy the whole farm and then you have to figure out what do do with the meat (wastage). Going between these two levels is expensive and could mean doubling or tripling your expenses so it's not an easy move to make.
You can...
1. Make your own hardware
2. Own/manage your own hardware
3. Rent commodity hardware from a standard hosting provider
4. Use IaaS (e.g. EC2)
5. Use PaaS (e.g. AppFog, Nodejitsu)
6. Use BaaS (e.g. Firebase, PubNub, Pusher.com)
The higher the level, the more technical flexibility you lose. The bigger the company, the more it makes sense operate at a lower level because there is no significant wastage being introduced as you move down the levels (you remove the middlemen so you can pocket their profits) and the capital cost to move between levels is relatively low.
If you compare software to another industry like cheesemaking for example, if you're a cheesemaker and you want to make your own milk, the next step is to buy the whole farm and then you have to figure out what do do with the meat (wastage). Going between these two levels is expensive and could mean doubling or tripling your expenses so it's not an easy move to make.