2010 the year of cloud-computing...M&A

Cloud computing is still more attractive to venture capitalists than it is to enterprise IT buyers, and that's unlikely to change in 2010. As IT buyers warm to the idea and implementation of cloud computing, 2010 is going to prove to be a very big year for cloud-computing M&A as big-fish vendors like VMWare, Microsoft, IBM, and Oracle round out their cloud product portfolios with little-fish innovators.

Cloud computing is more than just buzz. It is here to stay and is expected to take increasing shares of total IT spending worldwide. From a VC perspective, the even better news is that cloud computing is still far from maturity. There are many technology gaps that are not yet filled, especially in the areas of cloud enablement, management, monitoring, and security. In particular, VCs can find investment opportunities in start-up companies that develop solutions for hybrid cloud, which is expected to experience increased demand over the coming years.

Cloud computing offers real advantages, and has attracted a significant array of pent-up demand. Start-up vendors like Cloudera, VMOps, Rightscale, and others are inundated with requests for pilot projects as enterprise IT dips some very big toes into the cloud-computing water.

Indeed, it is start-ups like these that will help bridge the gulf between cloud hype and cloud practice in 2010, as the big vendors round out their offerings with the start-ups' technology.

Who will be bought? Those that solve real-world IT problems, not simply those that offer enterprises the ability to build private clouds or give them an on-ramp to public clouds.