Cloud computing market will start to appear bubble?

Cloud computing market is now maturing, but it will inevitably make a lot of questions, whether the cloud computing market has emerged bubble it or is moving in the direction of the bubble?

Of course this is not the case. At least until now it can not be asserted that some phenomena of high value in the field of cloud computing nowadays can explain the bubble in the cloud computing market. But one thing is clear, the shift from on-premise to cloud software can no longer be overlooked as a popular trend.

Patrick Walravens, a JPMorgan securities analyst, said in an investor report: "We believe the market share of large enterprise software vendors such as Oracle, SAP and IBM has been declining, with relative size Smaller, faster-growing SaaS competitors are increasingly being accepted by the market, and we are increasingly convinced that these companies are starting to take M & A as a way of gaining market share and gaining a more favorable competitive position. "

In the past few months, Oracle acquired RightNow Technologies, SAP acquired SuccessFactors and IBM acquired DemandTec. On-premise enterprise software vendors eventually have to admit that the way businesses buy technology is changing. They also admit that they do not have inherent competitive advantages in the cloud computing market, so they will go to small vendors that buy SaaS business models.

Oracle is particularly keen on the acquisition. The way customers shopped for software changed and it felt the pressure. Oracle on Tuesday released the latest quarterly earnings, earnings report failed to achieve its expected profit.

Peter Goldmacher, a senior research analyst at Cowen & Co, wrote in an investor report: "We believe this is because every one of Oracle's products is under pressure to cut costs and buy more New technologies, customers have canceled the maintenance contract. "

What happens in the next step? There are still many acquisition targets in the market, and small cloud companies need large enterprise vendors to help them sell their products. So in the coming months there will certainly be more acquisitions. It is estimated that by the end of 2012, we will be able to see more clearly which companies will become famous brands in the new era of software.

The success of these newly integrated on-premise cloud companies will depend on how small cloud companies integrate with large enterprise vendors.

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

Finally, according to the latest research by Bath, the price of cloud technology will be 30% to 40% cheaper than traditional products. This is a cost advantage IT can not ignore, and in a way it will affect all on-premise enterprise vendors. The acquisition may be their best solution to the dwindling cloud computing market share, so they are definitely willing to buy at a high price.

Michael Crandell, founder and CEO of RightScale, a cloud-management service provider, said: "I do not agree with the cloud bubble bubble that has emerged in the cloud computing market as it is a true third revolution in the technology industry. However, this can not be avoided because too many people or enterprises are over-enthusiastic about such actions, and those that can not meet the requirements will surely be eliminated by the market. "