Executive Summary (This is a document excerpt)

Strategists at product and service purveyors, big and small, are pondering the right paths to take as a variety of Web and Internet "cloud" technologies and cloud services offerings envelop the market. Three myths are fogging up the options: 1) Cloud service offerings are one large market; 2) cloud equates to virtualization; and 3) cloud providers will compete primarily on price. How should IT vendor strategists sell to or compete with emerging cloud service providers? We cut through the mist to segment the offerings into five cloud services markets. Two of these markets, Web-based services such as Google and software-as-a-service offerings such as salesforce.com, are known markets delivered from the cloud. These combine with three new cloud-infrastructure-as-a-service markets: 1) app-components-as-a-service, 2) software-platform-as-a-service, and 3) virtual-infrastructure-as-a-service. To capture these new cloud service providers as customers, IT vendor strategists must create new business units, evolve existing offerings, and evaluate when to act as a supplier — and when to compete.

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