Clouds Gathering: It's Consolidation Time
On top of the Citrix Systems Inc. (Nasdaq: CTXS)-Cloud.com Inc. deal came VMware Inc. (NYSE: VMW)'s announcement of its new cloud infrastructure capabilities, designed to address some of the key challenges the virtualization company faces in stretching its reach into cloud.
After most of the cloud M&A activity seemed focused on the communications service providers' efforts to buy up cloud players, the summer has been a vendor event, kicked off by Microsoft Corp. (Nasdaq: MSFT) and HP Inc. (NYSE: HPQ). (See VMware Unveils Cloud Infrastructure, Microsoft Calls On Telcos for Office 365 and HP Makes Big Cloud Claims.)
"The fact that VMWare announces updates to its cloud stack the same day Citrix announces its acquisition of Cloud.com just confirms the cloud race is still on," says Heavy Reading analyst Sarah Wallace. "Not only has VMWare beefed up storage with this upgrade, but security as well, an area that causes some to be hesitant about cloud services. And, since VMWare has upgraded its stack but still kept the product price about the same [as a product bundle], it may add to its appeal."
In the wake of his company's acquisition by Citrix, Cloud.com's CMO Peder Ulander speculated that the market for cloud infrastructure -- the layer between virtualization and the applications themselves -- is going to boil down to a handful of larger companies, some of whom see that critical layer as part of a much larger solution.
In fact, he believes the market may well come down to companies that use VMWare, those that use Microsoft and those that opt for an open-source approach. And it's in the latter category that Citrix/Cloud.com plans to shine, Ulander says, as both companies have been committed to OpenStack as the industry's best approach.
I'm not sure it will shake out that neatly anytime soon -- there are still IT giants who want a big stake of this market. But I do think this will be the summer when vendor cloud plans are set, and as with most telecom markets, only a few solutions are likely to survive.
— Carol Wilson, Chief Editor, Events, Light Reading