There's no doubt that the platform-as-a-service market is crowded. In addition to the independent PaaS vendors, infrastructure-as-a-service providers like Amazon have gotten into the game, as have traditional enterprise technology vendors. They won't all survive.
"Any market starts off with a cast of thousands and gradually gets consolidated until you get down to two or maybe four big dogs," says John Rymer, an analyst at Forrester. "I don't know why this market would be any exception to that pattern."
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Consolidation has already begun. PaaS provider Engine Yard gained PHP functionality by acquiring Orchestra. Salesforce bought Heroku to reach a wider range of users than its Force.com could attract. Oracle has invested in Engine Yard.
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