Many buyers, few suppliers — that could characterize the public cloud platform market today. Amazon Web Services, Amazon’s cloud division, and Microsoft Azure hold nearly three-quarters of all revenue in 2017, according to Forrester Research.Content Continues Below
But while few big vendors in the software as a service (SaaS) market equals big risks, including being forced to remain customers of one vendor, an August report warns, consolidation in the cloud infrastructure market also presents key benefits. For one, it’s getting cheaper to host IT operations on cloud services. And intense global competition means more options in local markets — for example, Azure is expanding to Africa and Google to South America, and China’s Alibaba is building new data centers worldwide.
Still, organizations that put all of their data and applications in one provider’s public cloud are exposing themselves to enormous risks, the report continued. If the provider experiences an outage, for example, companies could see their websites crash — and business skid to a halt — as hundreds of thousands did following the outage at AWS in February. Or a security breach at a provider could put their customer data and intellectual property into malicious hands.
CIOs can build hedges against vendor lock-in by adopting a multicloud approach, the report advised — spreading IT and business operations across several public cloud services and in private cloud deployments, where they can retain more control. That way, the fate of the business isn’t tied to any one public cloud provider.
CIOs can start by using multiple public cloud vendors — at least two — “and shift business from one to the other on a workload-by-workload basis,” the report read. For example, different platforms should be used for primary and backup storage.
As part of any cloud strategy, IT leaders should also include private cloud to lower the risk of being too dependent on any one public cloud platform. Though it costs more to build and operate a cloud on premises, “you’ll retain more control over when and how you upgrade and pay for it,” according to the report.
In an interview, Forrester analyst Andrew Bartels, the lead author of the report, said CIOs often start their cloud journeys by adopting private clouds first because of concerns about security and control – they don’t want any data out of their sights — and then move more and more pieces of their IT infrastructure to the public cloud as they get comfortable with it.
At that point, many CIOs will run up to, say, 70% of their operations in the public cloud, because of the economics of the cloud, but still keep 30% in a private cloud “as a hedge,” Bartels said.
So if the cloud vendor “starts getting greedy,” CIOs can pull data back to their own environment where they’re not exposed to risk, he said.
No easy move — yet
The strategy works because moving from public to private and back can be easier and cheaper than moving from one public cloud service to another, the report read, and none has yet made moves to change that.
Bartels said that may be because it’s not in their interest to allow customers to easily switch to another provider. “It may also be because they’re not getting client demand for it,” he said.
That may change, Bartels said, as companies continue building multicloud environments. If any vendor does give the option for cloud-to-cloud migration, brisk competition in the public cloud platform market means other vendors will quickly follow suit. It won’t happen today or tomorrow, though.
“We’re not at that point on the cloud platform side of vendors seeking to get the same degree of lock-in that you see on the SaaS application vendor side,” Bartels said.
To learn about the risk of vendor lock-in with prepackaged cloud applications, read this SearchCIO report.