FORTUNE — People like to talk about bubbles. And the cloud. And, more recently, a potential cloud bubble. But are we really heading in that direction?  Not yet. It’s too early to tell whether some of the recent inflated valuations (a la SAP’s acquisition of SuccessFactors) are justified. What’s clear is that the shift from on-premise to cloud-based software can no longer be dismissed as a passing trend. “We believe that larger enterprise software vendors such as Oracle ORCL , SAP SAP , and IBM IBM have been losing share to their smaller, faster growing SaaS competitors that are increasingly being accepted in the market,” JMP Securities analyst Patrick Walravens wrote in a recent report. “Increasingly, we believe these companies are viewing acquisitions as a way to stem market share losses and position themselves better in the competitive SaaS marketplace.”  In the last few months alone, Oracle acquired RightNow Technologies RNOW , SAP bought SuccessFactors SFSF and IBM snapped up DemandTec DMAN . Large, on-premise enterprise software makers are finally admitting that the way companies buy technology is changing. They’re also acknowledging that they don’t have the DNA to compete in the cloud, which is why they’re acquiring smaller players that have built their business on the software-as-a-service (SaaS) model.  Oracle in particular has been on a big acquisition spree. And it’s also feeling the pressure from the shift in how customers buy software. On Tuesday the company announced its quarterly earnings missed expectations:  “We believe this is because every product in Oracle’s arsenal is under pressure as customers are increasingly canceling maintenance contracts as they look to cut costs and buy more contemporary technology,” Peter Goldmacher, a senior research analyst with Cowen and Company, wrote in a recent note.  So what’s next? There are plenty of other acquisitions targets out there, and the smaller cloud players need the larger enterprise vendors to help in sales, distribution and reach. That’s why you can expect the feeding frenzy to continue in the coming months. By end of 2012, we should have a better sense of which companies — small and large — will become the next big names in this new era of software. We should also have a better sense of whether paying a premium for cloud companies will have paid off.  The success of these newly consolidated on-premise cloud companies in this space will partly depend on how well smaller cloud players are integrated into large enterprise vendors.  In early December, when SAP announced it would buy SuccessFactors (for $3.4 billion, a 52% premium over the average share price in the period immediately before the acquisition) it said it would allow the smaller company to keep running independently. But Lars Dalgaard, CEO of SuccessFactors, will be tasked with running all things cloud at SAP. And the sales teams will need to support each other in order to succeed — easier said than done since up until now they have competed with one another.  Ultimately, cloud technologies will be 30% to 40% less expensive than legacy products, according to a recent study from Bain & Company. That’s a cost advantage IT departments can’t afford to ignore, and a reality that will hit all large, on-premise enterprise vendors at some point. Making acquisitions is probably their best weapon against losing out in the cloud game and becoming irrelevant, so it’s no wonder they’re willing to pay a premium.  “I’m not a big believer in the bubble theory of the cloud because this is truly the third revolution [the first two being the advent of the PC and the Internet],” says Michael Crandell, CEO and founder of cloud management provider RightScale. “But it’s inevitable that with movements like this there are some people or companies that get overly enthusiastic. And there will be a shakeout of some players who just don’t cut the mustard.”
There are plenty of signs that the cloud computing market is maturing -- including blockbuster acquisitions. But is it starting to froth?