Hyperscale Headwinds

Hyperscale clouds can achieve operational efficiencies that essentially prohibit regional providers from competing on price.

Microsoft, Amazon, Google and IBM all have developed comprehensive cloud offerings. By lowering retail valuations for core services such as email and storage, they're putting new business pressures on SPLA partners.

For example, an SPLA partner offering hosted Exchange, but not adding unique IP or curated third-party applications for discreet customer types could find itself offering a product "increasingly indistinguishable from those of the mega-hosters at half that price," Paul said.

Consider that Office 365 customers have seen upgrades and improvements over the last year, without any change in cost, security, storage, mobility, business intelligence or admin control, he said.