The signs are there, says Jesse McMullin, Chief Growth Officer at LPK. With Google pulling back access to third-party data, marketers are scrambling. But who is behind those third-party cookies? Meta.
A cloud platform from Meta could cure long-felt pains around privacy, authenticity and competitive neutrality, among others. Learn what the potential move means for consumer and customer data—and why every business leader should get ready.
As a consumer strategy, technology and loyalty program expert, I have long followed trends and developments in the cloud computing industry—namely to help clients choose partners that fuel the creation of increasingly seamless, personalized consumer experiences.
Cloud computing is a highly competitive market where the leading players are constantly innovating offerings to gain an edge over their rivals.
Soon joining that elite crew? Likely Meta.
Sizing Up the Cloud’s Top Players
Before we dissect Meta’s potential next move, let’s break down the current playing field. The cloud computing market is dominated by three major players: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Missing from that list? Meta.
According to Gartner, AWS had a 40% market share in 2020, followed by Microsoft Azure with 19% and GCP with 9%. But these numbers don’t reflect the quality or full potential of each cloud provider—not even close. In fact, I’d argue that GCP is the weakest cloud provider in revenue, but it generates the best quality data—full stop.
Meanwhile, Meta is the most-used app in the world (really) and has better persona data than Google. GCP is the weakest provider in revenue because it entered the market later than AWS and Azure (and has struggled to catch up with them ever since). Its revenue grew 45% year over year to $4.99 billion in Q3 2021, but it still posted an operating loss of $644 million. GCP’s main advantage is its expertise in artificial intelligence (AI) and machine learning (ML), which are essentially driving the demand for cloud services. But GCP faces stiff competition from AWS and Azure, both heavily invested in AI and ML capabilities.
How can I say that GCP generates the best quality data? First, it leverages Google’s vast and diverse sources of data—think platforms like Search, Maps, YouTube, Gmail, and Chrome. Google collects and analyzes billions of data points every day from its users, which gives it a deep understanding of their behavior, preferences, and needs. Google then uses this data to improve its products and services as well as offer targeted advertising to its customers. However, GCP’s data advantage may be threatened by its decision to ban third-party cookies on its Chrome browser. (A huge deal.)
The cookies decision will limit marketing companies’ ability to track users across websites and apps, forcing them to rely on Google’s own data solutions, such as Privacy Sandbox or Federated Learning of Cohorts (FLoC). All of this produces business dependency on Google for access to user data, likely diminishing the trust and loyalty of customers.
“All of this produces business dependency on Google… likely diminishing the trust & loyalty of customers.”
Social Data’s Superiority
Meta is the most downloaded app in the world, agnostic of platform, because it owns some of the most popular social media platforms in the world: Facebook, Instagram, Threads (the most quickly downloaded app ever), WhatsApp and Messenger. Meta’s apps have over 3.5 billion monthly active users, who spend an average of 38 minutes per day on them. These apps are more widely available—on various devices, operating systems and wearables—enabling users to connect, communicate, share, and create anywhere they go.
“Meta’s apps have over 3.5 billion monthly active users, who spend an average of 38 minutes per day on them.”
The clincher: Meta’s apps also collect behavioral data about users, such as their likes, comments, posts, stories, messages, groups, events, pages, and ads—using this data to create detailed user profiles, which translates into personalized, deeply resonant content and advertising.
Leveraging Desires, Not Just Data
Meta’s data is more valuable than Google’s data because it reflects the users’ social interactions and preferences, rather than just their search queries and browsing history. Meta’s data can help businesses understand the users’ needs, desires, emotions, and motivations better than Google can. The data can also help it create more engaging and immersive experiences for its users, such as the metaverse, a virtual reality platform that aims to connect people in a shared digital space.
“Meta’s data is more valuable than Google’s because it reflects the users’ social interactions and preferences, not just their search queries and browsing history.”
But the idea that Meta possesses better personal data than Google is a complex one, as both companies have vast data repositories and sophisticated data analysis capabilities. It’s important to note that currently, Meta uses a mix of cloud storage services, including those provided by Microsoft Azure, AWS, and Google. This diversified approach to cloud storage ensures resilience and flexibility in their operations.
The Push for Data Transparency
In the fiercely competitive retail industry, cloud data is a prized asset that can shape business strategies and optimize customer experiences. Major retailers are increasingly cautious about where they host their digital infrastructure, with a particular wariness toward AWS that stems from concerns over potential conflicts of interest, given Amazon’s dominant position in retail.
“These moves underscore a collective effort to maintain data sovereignty and protect competitive advantages in a landscape where information is power.”
Iconic retailers such as Macy’s have turned to Google to enhance their customer experience, leveraging the tech giant’s advanced analytics and machine learning capabilities without the fear of data misuse. Similarly, Walmart has forged a strategic partnership with Microsoft, using Azure to bolster its technological edge against Amazon. Target’s former CIO, Mike McNamara, has advocated for a multi-cloud strategy too, bolstering a trend among large retailers to diversify their cloud services and avoid reliance on AWS. All of this underscores a collective effort to maintain data sovereignty and protect competitive advantages in a landscape where information is power.
Standing Up for Data Integrity
The shift away from AWS by these retail behemoths signals a broader industry trend toward cloud solutions that offer both innovation and integrity. In a bold declaration of Target’s independence from AWS, McNamara made it clear the retailer wouldn’t stand for any potential misuse of its data. Amazon’s acquisition of Whole Foods was a clear conflict of interest, placing it in direct competition with Target’s grocery business. This aggressive move by Amazon was Target’s last straw, prompting McNamara to state unequivocally that Target would sever ties with AWS for good. This stance resonated across the retail industry, signaling a growing discontent with Amazon’s ever-expanding reach.
Retailers are now taking a stand—seeking cloud services that offer not just technological innovation, but also a commitment to data integrity and competitive neutrality. The message is loud and clear: retailers like Target will not compromise their data sovereignty, nor will they fund the operations of a direct competitor. In the digital age, data is not just an asset, but the very lifeblood of a business.
“By detaching from direct retail competition, Meta’s cloud platform could offer a sanctuary for retailers’ sensitive data.”
Managing Competitors + Conflicts
In an era where data is the new currency, companies are increasingly vigilant about where and how their data is stored and managed. Large retailers like Walmart, Target, and Macy’s are acutely aware of the potential risks associated with hosting their digital assets on platforms that could have conflicting interests. It is a well-founded concern that hosting with AWS could lead to potential conflicts, given Amazon’s expansive retail operations. There is no public evidence to suggest that these major retailers rely on AWS for their cloud services. Instead, they are likely to seek out cloud solutions that provide them with a greater sense of control and data security, free from competitive, prying eyes.
Anticipating Meta’s Next Move
As Meta continues to expand its technological prowess, the possibility of it launching its own cloud service becomes more plausible. Such a service would not only align with Meta’s data-centric business model but would also resonate with retailers’ growing demand for a neutral, secure cloud hosting environment. By detaching from direct retail competition, Meta’s cloud platform could offer a sanctuary for retailers’ sensitive data, ensuring that their digital infrastructure is not under the shadow of a rival’s ecosystem.
Why This Matters to Brand Leaders
The introduction of Meta’s cloud service could mark a significant shift in the digital landscape, offering a compelling alternative to the existing cloud giants.
“For consumer-centric businesses, [this] represents an opportunity to reassess and reinvent their cloud strategies for growth.”
Retailers in particular would find value in a service that prioritizes data sovereignty while providing robust consumer data analytics without the fear of underlying competitive conflicts. This strategic move by Meta would diversify the cloud services market and reinforce the company’s position as a leading provider of reliable consumer data to its customers. For consumer-centric businesses like Procter & Gamble, The J.M. Smucker Co., Microsoft, Nike and more, this potential development represents an opportunity to reassess and reinvent their cloud strategies for growth.
How to Action on a Potential Scenario
As with every potential future scenario, it’s key to focus on anticipation, not accuracy. At LPK, we use the mantra “preparedness over prediction,” meaning it’s less important to watch the Meta-takes-the-cloud trend unfold to a tee, rather thinking through strategies for your business should the service materialize.
Quick Recap
- Aligning with a cloud provider that understands and respects the sanctity of consumers’ proprietary data is crucial in safeguarding your competitive edge—and your business’s ability to deliver seamless and personalized experiences. At LPK, we help businesses assess this as part of their Northstar definition and plan for growth.
- As the digital economy rapidly evolves, the ability to navigate these shifts with foresight and strategic acumen will be paramount.
- The future of cloud services is poised for dramatic transformation, with Meta potentially (read: likely) at the helm of a new era for data management and cloud hosting.
- This will reveal winners and losers in the business of consumer strategy and consumer experience. Those that align with Meta could repeat the rewards of richer, more dynamic consumer data—inputs integral to identifying Actionable Consumer Desires that drive more meaningful brand and product innovation.
- For businesses that do partake, this potential evolution promises to empower leaders with the autonomy and security they need to thrive in a data-driven world.
