Cloud computing market maturing but not bubble

Beijing time December 22 "Fortune" published a commentary, said that there are more and more signs that the cloud computing market is maturing, but at the same time it is doubtful that the cloud computing market is beginning to bubble?

People like to talk about bubbles, does cloud computing have bubbles? Or is it moving in the direction of a bubble?

This is not the case. It is not yet possible to say whether some of the recent value-inflated phenomena in cloud computing has been a bubble in the cloud market. It is clear that the shift from premise cloud software will no longer be overlooked as a popular trend. "We believe that," said Patrick Walravens, an analyst at http://www.aliyun.com/zixun/aggregation/17954.html > Morgan Chase Securities, in an investor report: " The market share of large enterprise software vendors such as Oracle, SAP and IBM has been slipping, while the relatively small, faster-growing SaaS rivals are gaining market acceptance. We are increasingly convinced that these companies are starting to use mergers and acquisitions as a way to gain market share and gain a more competitive position. ”

In the past few months alone, Oracle acquired the RightNow TECHNOLOGIES,SAP acquisition of the SUCCESSFACTORS,IBM acquisition of DemandTec. Premise enterprise software vendors eventually have to admit that the way companies buy technology is changing. They also acknowledge that they do not have an innate competitive advantage in the cloud computing market, so they are buying small vendors of SaaS business models.

Oracle is particularly keen on acquisitions. The way customers buy software has shifted, and it has also felt pressure. Oracle released its latest quarterly earnings in Tuesday, reporting earnings that failed to meet expectations.

Peter Goldmacher, a senior research analyst at Cowen &co, wrote in an investor report: "We believe this is because Oracle's products are under pressure and customers are canceling maintenance contracts to cut costs and buy more new technology." ”

What will happen next? There are also many acquisitions on the market, and small cloud companies need large enterprise vendors to help them sell their products. So there will surely be more deals in the coming months. It is expected that by the end of 2012, we will be able to see more clearly which companies are becoming famous brands of the new era of software.

The success of these newly integrated premise cloud computing companies will depend on the integration of small cloud computing companies with large enterprise vendors.

When SAP announced its acquisition of SuccessFactors in early December, it said it would allow SuccessFactors to remain independent. But SuccessFactors's chief executive, Larsdagade Lars Dalgaard, will also assume the responsibility of managing all of SAP's cloud business, and the sales teams of two companies need to support each other to ensure success.

Finally, according to Bath's latest research, the price of cloud technology will be 30% to 40% cheaper than traditional products. This is a cost advantage that the IT department cannot ignore, and in a sense it will affect all premise enterprise vendors. Acquisitions may be the best way to address the declining share of cloud computing, so they are certainly willing to buy at high prices.

Michael Crandell, founder and CEO of Cloud Management service provider Rightscale, said: "I disagree with the notion that the cloud market is already a bubble because it is the third change in the technology industry in the real sense." But this is unavoidable because too many people or businesses are too keen on such actions. The enterprises that cannot meet the requirements will surely be eliminated by the market. ”

(Responsible editor: The good of the Legacy)