Co-location services and cloud solutions are becoming more affordable as technology improves and vendor competition increases. PGR's expert community in this sector is enthusiastic about the proliferation of cloud computing, seeing a host of new players gathering on the horizon creating new storm centers that will sweep into the sector and steal some thunder from current players.

Enthusiasm and investment in the space are driving new opportunities and startups. Clearly, the advent of additional competition and the pace of adoption of cloud solutions, are setting the stage for more affordable options in both co-location and the cloud. So, while AMZN, the leading cloud services provider, is expected to retain its lead, its position will be challenged by more affordable alternatives.

For those enterprises uninterested or not ready to run in the cloud, a fresh wind is blowing in the co-location sector where capacity is increasing as vendors implement new efficiencies – minimum requirements now range between 100-200 watts-per-square-foot and as high as 350 watts could be seen in the near future – and new data centers come online. Just six months ago there was hardly any air to be felt in the sector as capacity was tight and co-lo vendors weren’t giving any breaks. Today, our network reports that vendors have become much more accommodating. For the short-term anyway, this marks the end of the capacity shortage in co-location.

All that said, the cloud’s the thing. Industry interest is clearly shifting from co-lo to cloud proliferation and development. As noted above, AMZN’s ease-of-value proposition has secured its position at the top but customers are going to be attracted by more affordable vendors like RAX and MSFT Azure. Speaking of those players, PGR’s experts are uncertain how successful RAX’s open sourcing of its Slicehost acquisition will be. There is very little confidence that SVVS has a viable cloud offering. However, our network thinks highly of MSFT Azure’s opportunity with the expectation it will have a significant impact within the next year and may even challenge CRM in SaaS.

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