RW Baird & Coforecasts that Amazon’s cloud business will generate $10 billion in revenueby 2016. The wealth management firm credits this growth to an increase in enterprise demand for cloud solutions: the top 10 cloud providers in the market grew 37 percent in 2012, while the top ten system integrators only grew by two percent in the same period.

The rise of the cloud in the enterprise space is affecting every traditional technology vendor, including Amazon’s counterpart in the data center. VMware has launched a number of initiatives to try and maintain license sales in the face of the cloud provider’s advance into its home turf, but AWS is only one threat to its reign.

Rackspace is going after both Amazon and VMware with OpenStack, the open-source cloud OS that was created to break the virtualization giant’s hold on the market.   OpenStack has gained a tremendous amount of traction among service providers and tech-savvy organizations, but the Street still has its doubts about the project.

Bernstein Research, which pegs itself as “Wall Street’s premier sell-side research firm”, issued a report of its own about the cloud market. The analyst group predicts that Amazon Web Services will rake in around $20 billion a year by 2020, and estimates that AWS is worth $24 billion – 13 times its approximate revenue today. In comparison, Rackspace is only trading at 5.3 times its own 2012 revenue.
OpenStack is still in its infancy, but Wikibon co-founder >Dave Vellante says that it has a lot of potential.  The fact that the solution is open-source means that it will appeal to developers, which is a key factor in his book because “there is a need for a platform that is the open-source or open-source-like platform on which big data applications can be developed and run”.