If there is consolidation in cloud providers, it could happen quickly and government needs to be ready to jump in and prevent the formation of a monopoly.
That's the broad belief held by Nathaniel Borenstein, co-creator of the integral Mime communications protocol and chief scientist of cloud email company Mimecast, who spoke to ZDNet UK on Monday.
As IT functions transition to being provided 'as a service', it becomes easier for a cloud player, such a Google, Amazon — via Amazon Web Services — Rackspace or others, to acquire competitors and absorb their hardware into its infrastructure footprint, Borenstein argued.
The ease of acquisition is aided by cloud companies' love for filling their datacentres with thousands of identical commodity servers. Knowing that the underlying hardware is homogenous makes it easier to design and roll-out new software stacks on top, he said.
"When an acquisition happens, traditionally it's like the snake swallowing the big animal, it takes a long time to adjust and a long time to adapt. But all cloud companies have the same outward-facing model and even if they're different organisations on the inside, it's not that hard to make it look like a common service," he said. "IT services have become little identical bricks that you can stack any way you want."
Because consolidation appears to be so easy, Borenstein worries that governments could be slow to jump in and regulate to prevent cloud monopolies from forming.
Utility computing is driven by "the same imperatives that drove electric grids, water systems, rail systems in many countries, television, lots of things", he said. This means that as the cloud grows in popularity, government overseers have to maintain a balance between a competitive market and one small enough to be regulated.
"My depressed American perspective is that our government doesn't seem capable of noticing when it's time to regulate anything, especially because I think that when it happens, cloud computing could consolidate so fast," he said. "[Consolidation] is a conceivable outcome. I personally think there has to be some regulatory involvement."