Cloud service providers: Opportunity or threat?

Grazed from IT Pro Portal. Author: Graeme Rowe.

It’s important to examine the current ‘state of play’ for cloud delivered solutions based on a couple of key dimensions, namely: what is being deployed in the cloud and who is providing the IT service from the cloud? The image conjured up by the term "cloud" is that of companies like Amazon, Google and Microsoft delivering large-scale computing infrastructure that eliminates the need for on-premise IT equipment and software. Since these cloud providers build their own infrastructure rather than buying from product manufacturers, it could be argued they are shrinking the market share.

The opportunity is larger than the threat
However, there are a number of other categories of service providers that balance, more than offset, the reduced spend and create an opportunity:

• Consumer SaaS providers aggregate consumer-spend into centralised shared enterprise infrastructure. Consumer applications that traditionally consumed end user equipment are moving to the cloud triggering a need for enterprise infrastructure. While some of these service providers build their own infrastructure others leverage product manufacturers…

• Enterprise SaaS providers aggregate SMB requirements into centralised shared enterprise infrastructure. A key customer segment that SaaS providers target is small businesses that would otherwise never have invested in enterprise IT infrastructure. Consequently, SaaS companies end up aggregating SMB spend into centralised shared enterprise infrastructure, and while some SaaS companies may end up building it on their own, most are focused on their core areas of expertise, choosing instead to deploy best of breed infrastructure from product manufacturers…

Read more from the source @ http://www.itproportal.com/2013/10/15/cloud-service-providers-opportunity-or-threat/