We continued to see the largest public cloud vendors gain share at the expense of smaller vendors (4Q15 was the fourth
consecutive quarter) because, in order to offer IaaS at competitive prices vendors have to operate at massive scale in order to avoid
hefty losses. We believe only a handful of the largest companies in the world can operate at this scale ? specifically, Amazon,
Microsoft, and Google
As the largest public cloud vendors continue to gain momentum, we have seen multiple vendors exit the space. Over the last six
months, two vendors, HP Enterprise (October 22, 2015) and Verizon (February 11, 2016) announced they would cease their public
cloud products and focus on private cloud instead. HP noted that a reason behind their choice was that the ?lines between all the
different cloud manifestations are blurring.? In addition, there has also been a recent reversal of strategy by telcos as they now look
to divest their data center assets (AT&T, CenturyLink, Windstream), after the space saw accelerated M&A activity in 2011 (Verizon
acquired Terremark, CenturyLink acquired Savvis).
