At infra/STRUCTURE Summit 2025, industry leaders from Layer 7 Capital, Hivelocity, and 365 Data Centers discussed issues facing private and edge cloud services.

The infra/STRUCTURE Summit 2025, held at The Wynn Las Vegas October 15-16, 2025, brought together some of the most dynamic individuals in the digital infrastructure industry to explore some of the major challenges in the age of artificial intelligence. Among the most future-forward sessions was “M&A Challenges and Opportunities in Private Cloud and Edge Cloud” markets.

Moderated by Steve Lee, managing director at Layer 7 Capital, a seasoned voice in infrastructure services, the discussion included Jeremy Pease, CEO of Hivelocity, and Bob DeSantis, CEO of 365 Data Centers, where they covered the rapidly evolving digital-infrastructure landscape of mergers and acquisitions (M&A) in private-cloud and edge-cloud markets.

AI Is Redrawing the Map of Global Opportunity

The changes in this landscape are being driven not just by traditional scale, but by shifting partner ecosystems, platform consolidation, and the rising importance of bare-metal/edge solutions.

This topic matters because as a major platform, vendors change strategy and partner models and cloud/colocation providers must adapt or risk being left behind. The conversation touched on the implications of big acquisitions (for example, around virtualization platforms), how service-providers are responding, and what this means for M&A opportunities. Major platform shifts – particularly by vendors like Broadcom after its acquisition of VMware – are up-ending partner ecosystems, costing service-providers, and forcing new strategies.

“VMware’s partner count has been dramatically cut, from thousands to around 15 in the U.S., creating major uncertainty for providers,” Pease said.

“365 Data Centers,” DeSantis said, “is moving toward open-source solutions and white-labeling strategies to manage cost and complexity.”

Platform Disruption Impacts Partner Ecosystems and Cost Models

Acquisitions, like Broadcom’s, has disrupted the virtualization and private-cloud ecosystem by reducing the number of official partners significantly. “This has ripple effects,” Pease said, “for colocation and cloud-services providers: Many must now renegotiate, restructure, or even exit current programs to continue offering VMware-based services.”

Cost models have changed, Pease noted: “Some companies are saving, but many solution-providers are challenged by the new partner-economics and the uncertain support model. This is relevant because, when the vendor-partner dynamic changes so drastically, service-providers face strategic and operational recalibration: Which platform do I back? What will customers expect? What will the margin look like?”

Differentiating Between Virtualization Platforms Versus Open-Source/Alternative Solutions

“VMware as a virtualization platform still holds strong in large-scale infrastructure with heavy storage, IOPS [input/output operations per second], and virtualization demands,” said Pease. “In contrast, platforms like OpenShift may be suitable for smaller environments, but lag in enterprise-grade features for massive scale.”

Bare-metal hosting has evolved beyond simply providing racks and servers – it now includes automation, ingestion capabilities and edge readiness, they discussed.

“Providers must decide technology bets,” said Pease. “If the large-scale platform evolves, but cost or partner support changes drastically, there may be incentives to go with alternative stacks or bare-metal/edge models. This has direct implications for M&A: acquiring or merging capabilities that support multiple platforms may become more attractive.”

Service-provider Strategies: Cost Optimization, White-labelling, Multi-platform Support

Strategies do differ among firms in the industry. “They are a colocation and multi-tenant cloud services provider,” said DeSantis, “and instead of staying in the ‘premier partner’ tier of VMware which is likely expensive and restrictive under the new model, they decided to work via larger partners for what they need and also to launch an open-source initiative that allows them to hedge risk.”

They mentioned cost differentials in the VMware program, and are exploring white-labeling open-source products through a partner.

“We learn that contractually,” Pease said, “Broadcom’s model now requires partners to hold gear and provide support – some partners are doing lease-back arrangements. There is a heavier requirement for level-one and level-two expert support for the VMware platform.”

Varying strategies matter due to cost pressures and changing partner models, which may force providers to rethink business models. “They might shift to white-labelling,” added Pease, “offering multi-platform to stay competitive. M&A may become a way to acquire those capabilities quickly.”

M&A and Consolidation Driven by Platform Shifts and Multi-technology Complexity

These platform disruptions may have fundamental impacts on the M&A market, the moderator observed.

“Indeed, the ecosystem is changing,” said Pease. “Broadcom’s attempt to simplify support by reducing partner count means service providers must weigh which platforms matter and how to support multiple technologies. If a provider has a mix of platforms, acquiring or merging with specialists can be an easier path to capability than building in-house.”

Lee reflected on his board experience: “Convergence into key players is happening. M&A isn’t just about adding scale, but about adding capability and flexibility – especially in an era where edge, bare-metal, and private cloud co-exist with public cloud. Consolidation may accelerate as smaller providers decide to join forces to gain platform-agnostic service capability and stronger vendor partner status.”

Future of Cloud Services, Edge Computing, and Customer Use Cases

Pease talked about bare-metal customers who are trying to reach end-users directly, like streaming, gaming, and crypto-validation. “Private cloud and bare-metal differ not just in hardware, but in how they are managed: bare-metal often powers edge computing and low-latency use-cases, with requirements for automation and ingestion, whereas private cloud may provide more managed abstractions.”

This is relevant as we look toward the future: “As customer demands diversify,” said Pease, “service-providers must build infrastructure that supports those use-cases. M&A can accelerate access to those capabilities. Also, providers must think about the total addressable market, not just in traditional colocation, but in edge‐adjacent segments.”

Infra/STRUCTURE Summit 2026: Save the Date

If you found these insights from the session useful, mark your calendar now: infra/STRUCTURE Summit 2026 – October 7-8, 2026, at The Wynn Las Vegas in Las Vegas. Pre-registration for next year’s event is now open; please visit www.infrastructuresummit.io to learn more!