Up-and-comers pushing cloud stalwarts to diversify

By Brandon Butler, Network World |  Cloud Computing

Leading cloud computing vendors are diversifying into new product and service areas, as well as expanding into new geographic territories in an effort to stave off up-and-comers, according to new research.

The moves reflect a maturation of the cloud computing industry, which Technology Business Research (TBR) analysts say is a transitioning from vendors differentiating by their technology offerings to separating themselves via business strategies, such as which new markets to enter.

Stalwarts of this developing industry have begun spreading into new service areas in an effort to extend their reach into the enterprise. Salesforce.com, for example, has broadened beyond just sales management tools and into application development; Amazon Web Services (AWS) has moved from being a virtual machine rental service to hosting entire databases in its cloud. Meanwhile, hosting providers are looking to South America and Latin America, as well as Asia and Pacific nations, to expand their reach.

Even with all these shifts, TBR estimates that only three companies - Salesforce.com, AWS and Microsoft - have crossed $1 billion in annual revenue for cloud computing, showing that the market is still in its early days.

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The shifts in the market are perhaps most clearly seen by two of the earliest, and now biggest vendors in the public cloud: Salesforce.com and AWS.

Started in 1999 by former Oracle executive Marc Benioff, Salesforce.com has been a pioneer in not just Software as a Service (SaaS), but cloud computing in general. When the company's IPO launched in 2004, it had revenues of $176 million per year with about 1,400 customers. This year, Salesforce is expected to cross the $3 billion revenue mark with 120,000 customers. "Although we do see competitors creeping in... Salesforce is here to stay," says TBR analyst Jillian Mirandi, who predicts 30% year-over-year growth for the company in the near future.

Originally published on Network World |  Click here to read the original story.
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