It will be "very difficult" for smaller cloud service providers (CSPs) to remain in business "if they continue to rely on provision of basic, undifferentiated services," said research company IDC.
Last month, major cloud service providers (CSPs) in Asia dropped their prices for core services.
"If the smaller CSPs are strong enough with decent customer bases, they will be acquired by larger providers. If not, then they're road-kill. In any case, both of the above will drive consolidation amongst the cloud vendors," says Chris Morris, AVP, Services Asia Pacific, and lead analyst, cloud services & technologies, IDC Asia/Pacific.
Morris explains that Cisco's announcement of its InterCloud partnerships with several major SPs is based on differentiated infrastructure-as-a-service (IaaS) -- differentiated by way of linkage of the Cisco technology layers (hardware and software) to provide a network service that aims to be the most efficient in terms of cost and flexibility in reacting to different workload demands.
"With its partners, Cisco will build out cloud services based on its reference architectures for different industries, including transportation and manufacturing. And that will become industry platform-as-a-service (PaaS) or iPaaS."
IDC believes partners can then leverage this robust platform to build and deploy solutions for the verticals.
Morris adds that this will, in turn, drive interest in app developers, both new and old.
"With Google getting serious about the enterprise and beginning to capitalize on its huge developer partner ecosystem, the whole partner landscape could get a bit bloody as service providers including AWS, Google, Microsoft, Cisco, Oracle and HP all vie for the same partners."