[ad_1]
The cloud storage market has been steadily expanding over the last few years and, according to Wasabi’s global cloud index report, this growth is expected to continue across all markets globally as businesses continue to shift their data loads away from on-premise storage and into the cloud. The speed of growth is such that forecasters today are predicting a compound annual growth rate of around 23% for the market and the market valuation to reach $376.67 billion by 2029, up from $70.19 billion in 2021.
Despite this growth, the market is still dominated by hyperscalers. In fact, there is a high enough level of dominance amongst hyperscalers to have raised alarm bells worldwide. In the UK, for instance, three hyperscalers collectively account for just over four-fifths of the entire cloud market.
The hyperscaler trade-off
A big reason for the dominance of hyperscalers in the cloud market is the sheer amount of cloud services hyperscalers have to offer. It’s easy for businesses to resort to hyperscalers for all of their cloud services as they are, ultimately, convenient options for corporate data management and storage. Hyperscalers are often able to cover the entire cloud needs of businesses, meaning IT professionals using these services do not necessarily need to think much about how and where to store company data. Hyperscalers across the board each have hundreds of products on offer.
Unfortunately, all of this convenience does come with a tradeoff: convenience for quality and price. Even with a hyperscaler-sized budget, product quality often suffers due to resources being stretched over so many products and cost competitiveness of each individual service sacrificed as more profitable services are used to cross-subsidize less profitable or successful services.
Because resources are always finite, focus is key to quality and innovation. No matter how big you are, you can’t be the best at everything. There will always be a need for vendors like Amazon that offer everything under one roof, but there will also be a need for specialty vendors, with proven interop to standard hyperscaler APIs, which offer best-of-breed products in a narrow area, with technical support that specializes in that area. As in the hardware world, people will eventually want to piece together cloud solutions involving many different vendors, each of which represents the best product in its category.
VP and GM EMEA at object-storage services provider Wasabi.
Convenience, price, and risk
The more services you buy from a single vendor, the more locked in you become with them, and the less flexibility you have when it comes to pricing and service. Having all your data in one place, including backups, is not something that I would recommend, as the more dependent you become on one vendor, the greater the risk. You may be relying on one of the many cloud apps that hyperscalers offer only to find that the vendor has decided to cease support for that app, thus leaving you high and dry. Whereas if any of your data is lost, if your backups are in a second vendor’s cloud, if worse came to worst, you would at least still have access to your backups. If you are running your own apps in the cloud, then it’s not too hard to move them to other compute resources, but if you are depending on your cloud vendor’s apps, then moving to a different vendor creates an enormous, expensive engineering challenge.
Another scenario is that you want to get all your data back but discover that it is going to cost a fortune in fees for data egress. Or, as has been the case recently with some hyperscalers, the vendor could suddenly decide to drastically increase prices. If you’re locked in, you have little choice but to pay up. Moreover, the person choosing a company’s cloud vendor is often distinct from the teams using the service. They therefore cannot always accurately anticipate how the company will end up using the service, and how much the company will consequently need to pay in fees for the egress & API-based hyperscaler model.
As companies migrate to the cloud, they are often unpleasantly surprised by their bills because the “pay for what you use” pricing policies used by the hyperscalers can include charges the customer may not even be aware of, for example, API calls or data egress. Most people never measure things like how much data they egress from their storage or how often they update or touch their data, but those charges still exist. As a result, bills can go well above budget, with businesses spending capital that could otherwise have gone to innovation or scaling. Last year, 52% of businesses exceeded their cloud budgets and 48% of this spending was allocated to fees alone. By choosing an exclusive provider for all of your business’s cloud needs, you run the risk of losing out when it comes to cost predictability.
The future is a multicloud world
The solution here is clear; don’t leave all your eggs in one basket. Working with multiple partners across the cloud is an important way to de-risk data, and can ensure that organizations go to the right vendor for ‘best-of-breed’ product offerings that fit their own unique needs.
Say, for example, media and entertainment organizations need to store large data files and access them quickly. a focused provider for that particular service is the best option. If we picture hyperscalers as generalist ‘one-stop-shop’ providers of cloud storage, we can look at the cloud market like we look at superstores and more focused stores. In a superstore, like Asda or John Lewis, a huge variety of useful products are conveniently all available in one place. Amongst focused stores like luxury wine, clothing, and shoe stores, we can find higher quality singular products that are popular amongst customers who need top-quality items and may want to consult experts with deep knowledge pools on that particular product.
Though hyperscalers may dominate the cloud market and conveniently provide broad-spectrum cloud solutions, a multicloud strategy is quite clearly the best way forward for businesses. While the cloud sector continues to grow at an incredibly fast pace, focused providers and hyperscalers occupy different aspects of the market and can work collaboratively across shared clients. Innovation and competition can continue to thrive amongst cloud providers as businesses flock to multicloud solutions and shop with both hyperscaler and more focused providers to best suit individual business needs.
[ad_2]
#Multicloud #future #industry