Three days later, Forbes’ contributor Joe McKendrick joined the discussion under the headline, “Cloud Computing Market May Become an Oligopoly of High-Volume Vendors.” My InformationWeek colleague Kurt Marko added his analysis July 11, “Inside the Cloud, Goliaths Generally Thump David. Sorry Underdogs,” citing the various explanation why big vendors will overwhelm small ones inside the cloud.

All of here’s good discussion and echoes my very own concern that cloud computing will crumple to the pattern that we have seen in previous phases of computing: some big vendors will come to dominate the recent era, just as they did the old. The saving grace is that it’s more likely to be a brand new set of masters, i assume. But i will flag down this train of thought right there. The cloud isn’t the same as the former phases of computing. For one, it’s dominated greater than we realize by way of open source code and occasional cost of entry-level, commodity parts.

Second, cloud computing isn’t something, though we keep relating it as single entity. The basic thing concerning the cloud is that it is a new way of distributing compute cycles to finish users that takes good thing about the network and commodity equipment. If the cloud were some thing, you would be in a position to tell me what constitutes a cloud data center. From watching them, I conclude there isn’t a blueprint. They’re simply the most recent data centers that we will build that profit from commodity servers and occasional-cost operations.

[ Cloud services pricing remains an apples to oranges comparison for users. See Why Cloud Pricing Comparisons Are So Hard. ]

Granted Amazon Web Services enjoys first-mover status. It has a bold and aggressive parent company in Amazon.com and funding that springs from the money flow of what’s becoming the globe’s largest retail business. Microsoft, with its Windows and Office desktop monopolies, also is a massive fully committed to providing cloud computing. IBM, a dominant player during the past, is coming more persuasively into the market with the addition of SoftLayer. And Google, with its dominance in search, became a possible giant of cloud computing when it announced Google Compute Engine.

“With large players coming online with similar sorts of services, we could be beginning to see a consolidation of the principle cloud computing market into the hands of some powerful vendors,” wrote McKendrick in Forbes. “This can herald the emergence of an IT oligopoly,” he concluded, citing 451’s Rogers.

Marko wrote: “Despite the fact that the cloud services industry continues to be young, the low-hanging fruit has already been plucked. New entrants looking to compete on price or tailored services for specific markets are reaching for higher and better, and thus sparser and sparser, limbs … From this attitude, the cloud Goliaths with their rich and ever-expanding platforms trump the rock-slinging Davids hawking raw compute capacity.”

These are good observations, just premature. We don’t have a cloud oligarchy. We are not even on the subject of one. Google did not have a general-purpose cloud product until June 2012 and it is not clear to me yet that it has got the critical mass to compete with Amazon. IBM was up to now behind that it needed to buy its way in through SoftLayer, an acquisition that was completed per week ago and still does not imply IBM is the subsequent member of the oligarchy. Microsoft is a cloud player, certainly for its existing customer base, but it has got its histrionics versus open source code to live down. Do you spot open source developers flocking to Microsoft Azure? Well, the long run cloud oligarch needs open source developers, a lot of them, to name it home.

I’m more intrigued by Heroku, Engine Yard, Joyent, Red Hat’s Open Shift, VMware’s Cloud Foundry and newcomers like DigitalOcean, which went from 100 to 7,000 servers between December and June. How could the oligarchs allow it to break out with that?

For the ultimate in this, I turned to Cloudonomics author and Telx senior VP Joe Weinman, who has also read Rogers’ 451 Research report and springs away with a more mixed conclusion. Rogers does suggest the commodity service economics of the cloud will create just a few large providers who compete on economies of scale, he agrees. “But that does not mean there won’t be a protracted tail of alternative providers, competing on other grounds.” One could be proximity. A videoconferencing service needs a knowledge center with regards to its customers to minimize latencies inherent in distance. Likewise, interactive gaming or video supply companies will seek the way to distribute their wares with regards to customers.

Weinman came up with an analogy: “Will the Marriott, Starwood and International hotel chains exist sooner or later? Certainly. So will bed and breakfasts,” he said. In the event you read him carefully, Rogers is saying something similar, that a balanced system will emerge with a mixture of large and small providers.

In my very own view, today’s leaders may someday be imprisoned within the cloud architecture that they so aggressively built out. A newcomer, benefiting from technical breakthroughs and the advantages of Moore’s Law, are able to outflank them faster than they are able to rebuild.

I fully expect an oligarchy sooner or later to form in cloud services. The difficulty is, I only see one sure member of it at this point. It is a young industry, with many options still being tested. As Rogers noted on the end of his analysis, “The issue with forecasting the long run is that no-one knows of course what is going to happen next.”

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