Current software licensed-based business models are ill-suited for the cloud. In order to be competitive, cloud providers are looking for ways to scale their business at the lowest possible cost, which, most of the time, means they’ll always prefer relying on Open Source software if it is feature-competitive with its proprietary counterparts. At the infrastructure layer, this is almost always true: virtualization, routing, firewall, load-balancing, storage, DNS, SSL, etc. are king in Open Source land. This makes it very hard for vendors like Microsoft and even VMware to remain competitive when up against cloud-providers’ offerings aimed at commoditizing the market. Consequently, in the new cloud era, especially at the infrastructure layer, either you are able to provide a full-fledge SERVICE offering (that is the “S” in “XaaS”) that can be packaged in a way that makes sense to your market, or times will be hard, very hard.