The answers may vary among different organizations and for different types of cloud services, but nonetheless addressing these questions may well help determine the positioning strategies for cloud service providers in an increasingly competitive market, most importantly for Public Cloud service providers.

Today there is a paradigm shift among businesses in the perceptions about cloud computing. From the initial concept of infrastructure renting to connected business operations, from lowering CAPEX costs to new opportunity enabling, many companies have emerged from “cloud watchers” to “cloud chasers” and eventually will want to become “cloud riders”. The worldwide adoption of cloud services keeps increasing as a result and many global companies are migrating from the earlier “Transition” stage to “Transformation” stage as the cloud technologies and service establishments move towards maturity and future world with clouds becomes clearer and highly enticing. A surprising jump in the adoption of SaaS in the 2014 4th Cloud Computing survey can be a proof: from 13% adoption in 2011 to 72% in 2014. In this fast shifting market with numerous global vendors jumping in and huge investment money piling up over the past few years, the positioning of the services and value differentiation are hugely important for the Public Cloud providers, for today and the near future.

Because Public Cloud offerings demand a huge amount of upfront and continued investments on both infrastructure and critical capabilities, some have predicted that the industry may eventually consolidate into the hands of a few large players. However, since cloud computing impacts the future IT and business models of every business and offerings can become more and more innovative, the market is immensely large if not unlimited. With increasing future varieties of value-added services(especially on software and application sides), hardware costs getting cheaper and cheaper, open-source tools for enabling cloud-based data handling and applications readily available on the market, it could result in a very fragmented market with both multiple “global department stores” and many “specialty stores”.

For example with IaaS today, value differentiation becomes increasingly difficult as the market is crowded with many large players or smaller players with solid investment backing. For many enterprises, IaaS can be considered a continuous evolution and a low-barrier business. Most of the data center or colo operators of the past can naturally become IaaS providers. On the other hand, today many large companies that already have their own data centers from the past are continuing building more to offer cloud services to themselves or to a related community, for future growth, for global expansion, for the coming age of data and connectedness including IoT, etc.. Operating secure clouds of their own makes a lot of strategic sense for them. Some of them also decided to join the fray as Public Cloud providers, such as AT&T, Verizon, etc. Even for many medium and small companies, Hybrid Cloud solutions are more on their minds for the future with mixed on-premise solutions along with various value-added public offerings from multiple vendors in the picture. Under these market conditions, the coming challenges and competitions for Public Cloud services could be even more intense.

Today, Cloud Computing is still at the early adoption stage throughout the global IT industry although the momentum is fast building. There are still only a handful of large and early-entry Public Cloud providers on the market who can offer a wide range of cloud services, namely Amazon (IaaS, PaaS), Microsoft(IaaS, PaaS, SaaS), Google(IaaS, PaaS, SaaS). If Cloud Computing is viewed as a disruptive innovation in the IT world, early entrants typically will enjoy a certain degree of advantages.