One in four cloud providers will either be acquired or forced out of business in the next two years, according to research firm Gartner.
Of the top 100 IT service providers, the research firm predicts around 25 will be pushed out through a major consolidation in cloud services.
Michael Salvador, a technical solutions manager at Belden, believes that businesses are being cautious when it comes to choosing cloud service providers.
"We're in the phase of buyer beware with cloud," Belden told Infoworld. "You better do your research -- there's no safety net out there."
Salvador claims that such concerns are inevitably leading businesses to choose larger and more established cloud providers, even if they are not offering the best value for money or services.
Gartner analyst William Maurer spoke at the conference of the risk vendors face if businesses do not place more faith in their providers.
"You need to make to make sure that your service providers are successful," he said. "Give them a chance to make a reasonable return on their investments, give them a chance to make some money. Don't take all the money off the table, because if you do, you are not going to have a lot of them around."
During the conference the audience was asked how much risk they felt there was in outsourcing data centre solutions. Almost half responded that they felt there was "a great deal of risk", while a third said they thought there was "somewhat" risk.
Another recent survey by Avere Systems revealed that over half of businesses cite security concerns as the biggest obstacle to cloud adoption. With this issue so prevalent, Gartner has previously predicted that the cloud-based security services market will be worth $3.1 billion (£1.9 billion) by 2015.