A much larger percentage of IT organizations appear to be less committed to the top three cloud service providers as it becomes more apparent that the compute and storage platforms being delivered have become commodities.
A survey of 458 development professionals, managers and senior leaders conducted by TechStrong Research found 43 percent are considering adding more cloud service providers in the next 12 months. In total, nearly two-thirds said they are at least considering, evaluating, or are ready to buy from a trusted alternative cloud vendor, with 20 percent reporting they have already contracted one.
AWS, Microsoft Azure and Google Cloud Platform dominate
Conducted on behalf of Linode, an arm of Akamai Technologies that provides cloud services, the survey found a full 93 percent of respondents are already using either Amazon Web Services (AWS), Microsoft Azure or Google Cloud Compute Platform (GCP), with nearly two-thirds (65 percent) reporting they already use more than one cloud service provider.
More than a quarter (28 percent) said they are using alternative providers to augment services they already consume from either Amazon Web Services (AWS), Microsoft, Google, Oracle, IBM Rackspace or Alibaba. A total of 42 percent of respondents said a cloud service provider offering core infrastructure services could handle 90 percent of their typical workloads.
The biggest factors respondents cited for using alternative providers are reducing reliance on a single provider (55 percent), improved price/performance (38 percent) and recent cloud outages (31 percent). Respondents also said they are concerned that large providers might one day compete with them as they expand their reach into other industry segments (24 percent) or may engage in business practices that would create a moral conflict (19 percent). A quarter (25 percent) said they already viewed their cloud service provider as a competitor.
Overall, nearly three-quarters of respondents (74 percent) said they expect their infrastructure will be cloud-based by the end of this year.
MSPs are gaining ground
Nearly three-quarters of respondents also noted they buy cloud services directly from an infrastructure provider, with the rest employing a managed services provider (MSP) or some other type of third-party cloud services reseller. Interestingly, more than one-third of respondents also reported using a payment mechanism other than a contract or request for proposal (RFP), according to the study. Among customers of alternative cloud providers, more than two-thirds (67 percent) are using some other payment mechanism, with one-quarter using cryptocurrencies to pay.
As the economic outlook remains volatile it’s not surprising that more organizations are considering their cloud options. The issue is to what degree those options will include cloud service providers that are not considered hyperscalers. Many of those alternative cloud service providers are likely to rely more on an MSP to engage customers rather than investing in their own direct sales force.
There’s no doubt that when it comes to mindshare AWS, Microsoft and Google still dominate the cloud. However, as time marches on the cloud has become a much less mysterious place. More savvy customers now realize they don’t need much more than basic hosting services for applications, especially if those applications are not highly distributed or don’t tend to dramatically scale up in ways that are unpredictable.
The issue now for MSPs is with a much larger percentage of customers evaluating alternate clouds, is to what extent will they also need to expand their cloud partnerships as the overall sensitivity to cloud costs continues to rise.
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