There are a few major difficulties for any web host to build a any kind of advanced clustered infrastructure, or let's call it Cloud.

1. The costs
Building a private Cloud requires significant investment. We have calculated that we shall put around $100,000 in purchasing hardware needed to set up a cloud. The networking equipment is not included in this price. It should cost another $100k.

2. The Cloud software platform
Anyone who wants to deploy their own cloud should create its own in-house platform or to buy a cloud automation platform from someone. There are very few software providers that offer fully automated and mature solutions. But there are many that claim to offer cloud automation solutions, having at the same time some kind of virtualization platforms.

3. The migration Process
There is no hosting standard for the cloud. There is no Cloud scenario for web hosts. No practices on successful migration to follow. So, it looks risky!

4. The Marketing and Branding
When you start a cloud hosting provider today, people usually say "Great. What kind of a cloud is this... is it like EC2, or more like RackSpace, etc.". So any web host that moves to the cloud infrastructure must have answers on such questions and to be prepared to spend a lot of money to position its cloud hosting service on the market.

I have thought a lot on these issues and I have answers for myself. We have a plan how to move to a cloud infrastructure. But it will cost us a lot of money. Honestly I think that middle-sized and smaller web hosts must team up or merge in order to successfully compete major clouds.