Google, IBM Cloud Charge Pressures Amazon, Rackspace
March 27, 2013
Grazed from Investors.com. Author: Rheinhardt Krause.
Stiffer competition and consolidation is in the air in the cloud. Smaller service providers, such as Rackspace Hosting (RAX) and privately held SoftLayer, loom as takeover targets as more tech giants — including IBM (IBM) and Google (GOOG) — expand in the cloud computing market. Large tech players have the scale — massive data centers packed with servers — that enable them to cut prices. They’re likely to dominate the cloud services market, says James Staten, an analyst at Forrester Research.
"Cloud does favor scale; the top players have it in orders of magnitude that others can’t come close to," Staten said. "To compete with the Amazons of the world, they’re going to need scale and to build out data centers in front of customer demand." Amazon.com’s (AMZN) Amazon Web Services (AWS), the fast-growing cloud computing arm of the online retailer, faces a new challenger in Google. It’s expanding its Google Compute Engine cloud service…
Like Amazon, Google is expected to offer rock-bottom prices for cloud infrastructure-as-a-service (IaaS). "Google may eliminate the opportunity for some others to grow," Staten said.
In IaaS, customers rent computer servers and data storage in remote data centers and access their apps and data via the Internet…
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