Good riddance! 25 percent of IaaS providers will be gone in a year

Some will shift into cloud specialties, some will be acquired, and some will die -- it's natural selection in action

"Cloud adopters face serious risk in the next two years because of the strong possibility that their provider will be acquired or forced out of business, according to Gartner," says this Computerworld story.

Gartner is calling for major consolidation in the cloud computing space, saying that about 25 percent of the top 100 IT-oriented IaaS providers won't even be around in 2015. Some will get acquired, but some will simply go out of business, as we've seen happen already this year.

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Calling for consolidation in the cloud computing space is like calling for the sunrise tomorrow morning: It's going to happen, and it's a natural progression of any technology wave. Companies innovate, grow the market, and the market consolidates -- now repeat with something else.

Why the coming disappearance of IaaS providers? The ecosystem is only so large, and natural selection will begin to take place. Simply put, we have too many cloud providers for the marketplace to support. Even with the huge cloud growth over the next several years, smaller providers won't be able to keep up with the larger providers. Some will find a niche to build value in, and more will get acquired for their customer base.

Enterprises should expect this consolidation and dial it into their plans. The silver lining is that very few enterprises will be dependent on these smaller providers. Even if you are, there will usually be a glide path to another cloud service. However, some enterprises will get hurt when their cloud provider abandons the market altogether.

The typical result of consolidation is a much better selection of technology and a less complex market. Cloud computing is a confusing mess of buzzwords and bad ideas being sold as "good." Removing the nuttiness from the space will actually benefit those who are trying to solve real business problems with the cloud.

Consolidation is natural, it should be anticipated, and it's mostly a good thing. Don't fear it.

This article, "Good riddance! 25 percent of IaaS providers will be gone in a year," originally appeared at Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at For the latest business technology news, follow on Twitter.

Copyright © 2013 IDG Communications, Inc.

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