Non-traditional companies such as Google, Amazon.com, Ciena, Splunk, Verizon Communication, and NetApp are threatening traditional computer technology companies such as Hewlett-Packard, EMC, and Cisco Systems when it comes to cloud computing.

Traditional computing required enterprises to build data centers to run the software it needed for operation. But the new technology giants in cloud computing business flex their muscle to get price reductions and other concessions to buy network gear and use that savings to lure enterprises to use their cloud computing. It is a good bargain for many smaller businesses that don’t have the same bargaining power to get concessions.

Another trend that is taking place is new cloud computing companies are challenging traditional software suppliers. Google, Verizon Cloud and Amazon.com bundle their own software that runs on their hardware and sell at a lesser price compared to traditional IT services such as EMC, Cisco, and Oracle. Another area of concern for traditional IT services is that newcomers are using new software technologies from start-up companies. These packages are more efficient compared to traditional IT software and runs much faster with less storage requirements. New data storage technologies are incorporated into new start-up company software making their products more appealing to companies.