Burns was also quick to caution that the cash infusions many small cloud computing startups are receiving show that it's not just hype driving the investment in cloud computing vendors.
"There's hype, and there's people who put their money behind things," he said, adding that VCs and investors tend not to funnel millions of dollars based on hype alone.
And cloud computing solution provider Appirio, which in February 2009 closed out a $10 million Series C funding round, said the VC community has been eyeing cloud startups for a while, but the increase in investment activity shows that cloud computing is now on nearly every CIO wish list.
"VCs have been pouring money into cloud computing startups for years," Appirio CEO Chris Barbin said. "Now that cloud technologies are on the priority list of almost every enterprise CIO and even mandated to federal agencies, it's not surprising to see an uptick in investment. The interesting thing will now be to see which cloud investments start to pay off -- is it infrastructure, platform, apps or even emerging categories such as cloud brokerages?"
Just where cloud investments will pay off most is still up in the air. Burns suggests that it will be on the cloud computing infrastructure and service provider sides; while Skytap's Rosa suggested that cloud management and cloud automation, where Skytap plays, will be a big winner for investors. Collina Ventures' Hill pegged cloud infrastructure and cloud security as the big draws moving forward, but added that investors will be attracted to companies that that have found a "focused niche," whether that niche is technological, vertical or geographical.
Regardless of which segment most prospers, the market and the opportunity for investors and cloud computing vendors will continue to snowball, Hill said.
"It's going to accelerate," he said. "What's going to happen is we're going to see some companies continue to have success and need more capital and the stakes are going to get higher. There has been a lot of hype and now's the time to deliver value."
Neovise's Burns agreed.
"Long story short: It doesn't feel to me like we hit that peak yet with funding and acquisitions…," Burns said. "The VCs are out there looking at it and saying 'there are a lot of people moving this way.' They see this huge market that's nowhere near done growing and look for places to invest."