Alan Matula, CIO of Royal Dutch Shell, reckons that his relationship with his company’s core vendors will change dramatically in the years to come due to cloud computing. Innovation, speed and agility will ultimately be the measuring stick for IT vendors.

Ultimately, Matula is looking for a vertical cloud stack that is managed. Is lock-in a concern in the cloud? “If you look at your current footprint you’ll realize you’re already locked in somewhere,” said Matula.

Matula was speaking at a recent SAP event unveiling S4/HANA. Matula spoke during SAP’s analyst meeting about how he had dozens of HANA projects underway mostly for new applications. Royal Dutch Shell is a key example of how large enterprises are still betting on one or two core vendors to run their businesses.

Royal Dutch Shell is also looking at the cloud as a way to be more agile and transform the business. When I caught up with Matula, the most interesting thread was his take on the cloud market. When you combine the private and public cloud vendors it’s clear in a hurry that the space is crowded. He said:

The cloud space is crowded and there are many players offering various parts of the stack. The winners will offer a vertical stack from infrastructure to applications. Some will do it all themselves and others will partner. But the component model will break down. Every time you add a player you add margin. You can’t have 30 partners in the cloud because of margin stacking. Right now it’s interesting because there are vendors who have control of a part of the stack and they’ll have to run the whole stack.

If Matula’s theory is on target it’s worth surveying your technology supplier landscape and view it through Matula’s lens. Will the players with the applications ultimately win? Oracle and SAP sure hope so and both Salesforce and Workday are pitching all-cloud bets. Will infrastructure cloud winners move up the stack? Amazon is moving up for sure. Can hardware vendors move beyond infrastructure? IBM and HP are betting that way. What does a software defined world look like? Notice how VMware has moved well beyond virtualization.

Here’s a starter set on how to see your vendors through this managed stack meets cloud lens. We’ll start with the big guns.

  1. Amazon Web Services. AWS made its way into the enterprise via infrastructure as a service, but is now offering mail, collaboration tools and other apps upstream. Those applications are table stakes, but it wouldn’t be too surprising to see AWS move upstream. AWS is also likely to be a partner for other major vendors upstream in applications.
  2. Cisco. Cisco provides the infrastructure and will be a clear enabler of private clouds. Cisco can offer a lot of parts of the stack from its networking perch. Cisco has moved to make its software easier to consume without hardware. That move makes it more of a contender in the managed stack environment.
  3. EMC/VMware/Pivotal. These three suppliers all have the same parent and when you put them together, the managed stack picture comes into view. The EMC-owned trio has multiple parts of the stack. What remains to be seen is whether the trio of private and hybrid cloud vendors can really turn on the public services.
  4. IBM. IBM has also put together infrastructure, platform and application parts. Not surprisingly, IBM is going into the stack through analytics, Watson and other key specialties such as e-commerce. IBM’s stack—cloud or on premise—will remain key in large enterprises because the company is predictable and reliable.
  5. Microsoft. The software giant is probably in your data center via Windows Server, on the front end with Office and sprinkled throughout your enterprise. Azure changes the cloud equation for Microsoft, which can bridge hybrid environments well and provide infrastructure to apps. Like Oracle, Microsoft is likely to play the managed stack game going forward.
  6. Oracle. Clearly the company is betting on offering a red stack of stuff. Oracle is likely to be the largest cloud player with infrastructure-, platform- and software-as-a-service. The win (and profit margins) for Oracle will remain databases and applications so it will play in the infrastructure space to be able to upsell you later. From private to public cloud offerings, Oracle’s strategy makes a lot of sense through the managed stack lens.
  7. Salesforce/Workday. These two companies are likely to a) pitch all-cloud bets and b) increasingly be partners on deals. Given that both can abstract the infrastructure layer it’s possible that the two vendors team up more and potentially add a player like AWS as a cloud trio.
  8. SAP. SAP has the applications. S4/HANA will be a managed service soon and SAP will likely deliver most of its applications as a service. However, SAP is mostly an on-premise play despite the chatter to the contrary. What’s unclear is whether SAP can offer a stack of infrastructure and platform if you don’t also bet on HANA. SAP will likely have to partner. Amazon Web Services is a key partner for SAP.

Today, none of these aforementioned vendors—or ones I’m omitting at the moment such as Google and HP—have the complete picture. They certainly don’t have industry clouds—a retail, healthcare or utility stack—nailed.

Over the next five years, it’s a safe bet that a lot of these players will go to the cloud dance together. What to beware of is the margin stacking scenario in the cloud.