Cloud computing seems destined to be the way enterprises will use information technology. The drastic cost reductions and impressive operational improvements make the transition an unstoppable trend. The “What is cloud computing?” question now, however, seems to be morphing into “Where is cloud computing going?”
While software-as-a-service (SaaS) providers see their market rocketing upward as the easiest and quickest path for cloud adoption, infrastructure-as-a-service providers are suffering as their high-capital-cost commodity business transitions to a profit margin race to the bottom. This unsettling paradox, driven by increased competition between major infrastructure players, portends a near-term shakeout as smaller players either fail, exit or get gobbled up.