CNS Case Summary

CNS is part of the growing industry of cloud-based storage for user devices. CNS had long been given the title of being the market leader, especially in cloud servers, however with the growing economy in this particular industry, CNS began to see erosions in their company and their market shares start declining. There began to be a noticeable erosion in the price which was due to many primary factors that can correlate with Porter's Five Forces. CNS's main factor behind the erosion is that there is a high number of aggressive competitors which places an unattractive image on the company. CNS's largest competitors for IaaS are Trident and Millennium, which combined, the two hold more than "70% of the cloud server market (Case)." As the cloud

Smaller and newer competitors could enter the market on a cyclical basis or offer their clients with a one-time storage deal. These companies have a fresh view of the market itself and they would have an advantage over the upper handed companies to see where they should focus more on for their product and what they should offer for price and availability. This could potentially take away business for CNS. Another factor to the erosion would be that buyers all feel like storage products are all the same. This makes it difficult for CNS to make their product differentiated from others. Some customers do not know much about storage servers which would be the best opportunity to teach their clients about the customization available to each user. CNS needs to create their product, at a fair price, that differentiates themselves from their

The buyer's "bargaining power grows when the products represent a significant fraction of their costs or when they integrate upstream (Case)." Erosion will occur when the company selects buyers who are less familiarized with the product or have less power to negotiate or to switch suppliers due to contracts. Some smaller businesses are looking for a quick need for storage so they would sign on with CNS. Clients focused on price and they would use fewer of the PaaS that CNS provided as a service. Taking away the customization available for users, buyers became freer to "test the waters" in the market and see how they liked other companies when their contract expired. There becomes a threat of the suppliers' growing bargaining power when they are able to raise or lower the prices or reduce the length of time for the given