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The vendor landscape

Cloud computing disrupts the vendor landscape

Non-traditional players like Amazon and Google shake things up, but enterprise mainstays like Microsoft and VMware may get the last laugh

By Christine Burns, Network World
December 05, 2011 12:06 AM ET

Network World - If you think cloud computing is a disruptive force within the enterprise, just imagine what the cloud is doing to the vendor landscape.

The sheer number of cloud players - or companies that claim to be cloud players -- is staggering. By some estimates there are more than 2,000 software as a service (SaaS) companies alone. At this early point in the cloud revolution, there are certainly front runners, but the field is wide open.

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For example, the marquee SaaS player, Salesforce.com, owned a paltry 8.7% of the total SaaS market, according to a 2010 IDC report that tracked 84 vendors. Other big names --Intuit, Cisco, Microsoft, Google and Symantec - were all below 5% each. That leaves scores of other competitors with tiny market shares today, and no place to go but up.

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Infrastructure-as-a-service (IaaS) has more than 30 major players, both pure-play outfits that provide pay as you go, on-demand compute services, and those rising into the cloud from the traditional managed services realm. And Forrester research is watching at least 40 platform-as-a-service (PaaS) providers who say they can help developers build cloud apps better, stronger, faster.

To further muddy the waters, many vendors are extending their cloud offerings across the neat SaaS, PaaS and IaaS boundaries. (Read SaaS and IaaS: an expert's guide.)

"It's true that most of the disruption caused by cloud computing relates to enterprise [operations] and IT. But it's also been pretty disruptive to the vendor community as well," says David Mitchell Smith, vice president and fellow at the Gartner Group.

Smith believes that a tremendous shakeout will occur over the next year or two. He predicts that by 2013 a small handful of vendors will emerge as leaders delivering both enterprise systems and cloud services.

So who are those vendors? The two names on Smith's short list are Microsoft and VMware.

Smith argues that Microsoft made a seismic shift to a SaaS delivery model in 2008 and has since delivered Microsoft Office365, SharePoint Online, and Microsoft Dynamics CRM Online. In the PaaS arena, Microsoft is pushing its Azure platform of AppFabric, SQL Azure and Windows Azure. And, Microsoft's making headway in pushing Azure down into the IaaS space as well.

VMware's vSphere hypervisor and management software has long provided trusted virtualization capabilities in the enterprise. VMware is also making a strong IaaS play by building a network of vendors who use vCloud to deliver cloud compute services.

And VMware has various PaaS irons in the fire. There's its own vFabric PaaS platform. Plus, the company launched CloudFoundry, an open PaaS platform housed at www.CloudFoundry.org where developers can contribute to collaborative open source projects. And there's a hosted PaaS platform operated by VMware at www.CloudFoundry.com.

"There are no guarantees in a market this size, but we see [Microsoft and VMware] as the companies in the best position now," Smith says.

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