Early Cloud Investment makes for a Buyers Market

The $250mil HP-Microsoft deal announced a couple weeks ago speaks to how quickly and seriously the big players have converged on the Cloud opportunity.  Literally before the market has even come to understand what 'Cloud' means, we've seen Cloud deals involving many of the top global IT players including Cisco, EMC, VMware, HP and Microsoft.  Only Oracle-Sun is dialing back their cloud investment.

This is different than the uptake around ASPs many years ago.  Small pure-play start-ups like Corio and Jamcracker were prominent in the market for years with little competition from top IT firms, who instead chose to sit out the market wave and acquire ASP capabilities after the bubble burst. This early involvement of larger players means more vendors with capabilities and expected staying power; in effect two Savvis' for every one GoGrid.  So customers don't have to choose between start-ups who "get it" and dinosaurs who don't.

With more investment, sooner, we can expect the life cycle of the category to be similarly accelerated.  It bodes well for customers looking for validation and future-proofing from leading vendors.  It will probably also shake out the smaller players sooner, as they find themselves competing with established tech brands touting seemingly less-risky solutions.  Perceived security and 'trust' will be key aspects of success, especially in the hosted cloud space.

So with more M&A and investment expected relating to the Cloud, take your time before making big investments, plan with an eye towards federating your external Cloud services with your internal data center environment (rather than creating a hodge-podge of cloud silos), and enjoy a developing buyers market in all things Cloud.