Citrix Systems Inc. (Nasdaq: CTXS)'s acquisition today of Cloud.com Inc. could have a significant impact on service providers, many of whom were using Cloud.com's open-source approach to build their own cloud services. (See Citrix Buys Cloud.com and Cloud.com Enabling Hybrid Clouds.)

It puts Citrix in a stronger market position, says Sarah Wallace, analyst with Heavy Reading.

"This acquisition is not a surprise," Wallace says. "Obviously, Citrix and Cloud.com will combine efforts in order to offer a comprehensive suite of cloud services to compete with VMWare. It also confirms that Citrix is continuing to take move from the PC to the cloud and solidifies their platform as a service environment (PaaS) which allows for scalability of applications."

Analyst Krishnan Subramanian of CloudAve agrees the acquisition will give Citrix new momentum in competing with VMware Inc. (NYSE: VMW), Microsoft Corp. (Nasdaq: MSFT) and others hoping to play in the cloud infrastructure space.

"After struggling a lot in their earlier quest to make a credible cloud play, Citrix can now move ahead with a considerable momentum," writes Subramanian.

Citrix is pledging to maintain a commitment to openness, saying Cloud.com will remain hypervisor-agnostic, which is a key factor in its appeal to service providers, who are looking to build cloud infrastructure that is flexible and able to support public, private and hybrid clouds.

Why this matters
Service providers, including big players such as Tata Communications Ltd. and KT Corp. , have leveraged Cloud.com infrastructure to enable them to get into cloud services quickly. Given the high interest in cloud offerings, however, there is considerable competition to win service provider business. Citrix's acquisition of Cloud.com makes the latter part of a larger, better-known operation, which could increase its appeal, if Citrix maintains its commitment to an open-source cloud approach.

Just as there have been many acquisitions of cloud and "as-a-service" companies by communications service providers, this deal indicates there will be continued consolidation in the software and platform space.

For more

• Microsoft Calls On Telcos for Office 365
• Huawei, Telus Open Cloud Center
• HP Makes Big Cloud Claims
• OpSource, VCE Tackle Carrier Cloud
• NSN Takes Inoventica Into the Cloud

— Carol Wilson, Chief Editor, Events, Light Reading