The CEO of Accenture-owned Cloud Sherpas has predicted more consolidation will happen in the pure-play cloud space, as businesses increasingly move away from on-premise kit.
David Northington led Cloud Sherpas as CEO from 2011 until last October, when the company was snapped up by global player Accenture. At that point, he became managing director of its Cloud First Applications business, which is where the Cloud Sherpas unit sits.
Cloud Sherpas was a top-level Google partner and billed itself as a born-in-the-cloud partner, or pure-play cloud firm. Northington told CRN that similar companies which have popped up in thepast five or six years will begin to merge, describing it as "the natural thing".
"Many [born-in-the-cloud] companies are backed by venture capital or private equity, or the mortgage on the founder's house, or some similar arrangement," he said. "If you think about that sort of capitalisation, it has to lead to some kind of liquidity, whether they go public or consolidate.
"I think consolidation will be the more likely path than going public, but I don't think nobody will go public – some might. I definitely think there will be consolidation and I think we will see that take place around the public cloud applications solutions that have become enterprise scale. We will see a lot of consolidation as organisations scale."
Before last Christmas, born-in-the-cloud firm Cloudamour was acquired by fellow cloud player Redpixie, just a few months after Cloud Sherpas was snapped up.
Northington said that demand for similar cloudy companies will increase as time goes on.
"I think that if you look at enterprise today, it's a hybrid environment – there is some on-premise and some cloud," he said. "On-premise is bigger than cloud in almost every organisation, so we are still very early in this journey.
"But we have to assume this journey is trending towards 100 per cent cloud applications in an organisation. Does it ever get to 100 per cent? I am not making a prediction here, but I think we can safely say it is trending towards 100 per cent. Whether it ever gets there or not, we will have to see. It will be hybrid for a long time, with the footprint of cloud getting bigger and bigger and bigger."
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