SAN JOSE, Calif. Cloud computing will rain down a new level of competitors and price pressures on today's data center hardware vendors, reshaping the business computer market, according to an industry consultant.
Rather than buy more hardware, businesses are beginning to explore using remote services running on the giant data centers of so-called cloud services providers. Thus cloud computing lets companies such as "Amazon, Google, Salesforce.com and others be on the same procurement schedule as a Hewlett-Packard or Dell," said Chris Weitz, a director at Deloitte Consulting Technology.
"We think this represents a pretty significant disruption in the way IT is consumed, and it's just starting now," Weitz said.
Virtualization software that blurs the borders between in-house and remote systems will become a highly valued product, key to accelerating the trend. Such hypervisors will be at the core of tomorrow's hybrid systems that can flexibly work across internal and external clouds, Weitz said.
"That's the missing piece right now," he said. Once such software is available "all bets are off because people will have a whole new way of looking at their architectures," he added.
Developing such hybrid virtualization software represents a new opportunity for today's computer giants such as Dell, Hewlett-Packard, IBM who face increasing price pressures on their hardware. That's because cloud computing will drive an increasing share of the server and network business to the large data centers that tend to use lowest cost systems in highly redundant configurations.
Standards for cloud services will be key to creating the new hybrid virtualization software. But standards may be slow in coming.
Today's cloud pioneers such as Amazon, Google and Microsoft "want to try to dominate [cloud computing] rather than cooperate," Weitz said. "What will need to happen is the users of these services will have to vote with their pocketbooks and force vendors to cooperate," he added.
Competitors and academics are also putting on pressure for standards.
A group of 38 vendors called for cloud standards in March. Earlier, researchers at the University of California, Berkeley called for an open API for cloud services. And HP, Intel and others are trying to accelerate work on open source software for cloud services.
With or without standards, Weitz will claim end users are showing growing interest in cloud services in an October 1 webcast titled "Not If, But When and How."
"The way Microsoft, Amazon and Google are throwing money at buying large-scale data centers and make them cost effective, it will be hard to match their economics for enterprise consumption," Weitz said. "Ultimately, the cloud market could become bigger than the enterprise market," he added.
In the end, "there will be a big fat disruption of the hardware players and the way they have been selling IT for the last 20 years will have to change," he said. "It's way too attractive to buy this stuff as a virtual service."