News

Research Firm: Top Clouds Use Strong-Arm Tactics 'In a Race to Colonize Enterprises'

• By David Ramel
• 11/18/2022

In the IT world these days it's multicloud this and multicloud that from just about everybody ... except the top cloud providers, which for years have been led by AWS, Azure and Google Cloud.

Those three and other big clouds unsurprisingly prefer a single-cloud world -- theirs.

"The hyperscale cloud providers are in a race to colonize enterprises in an attempt to become the primary strategic supplier of cloud services to address a broad range of IT workloads," research firm Gartner said in its recent Magic Quadrant report on Cloud Infrastructure and Platform Services (CIPS).

In that report, as for years, the only three vendors in the "Leaders" box are those aforementioned top vendors, who have had a lock on the market almost since it started in 2006 with some remote web services offered by an online retailer.

"The efforts to colonize enterprises are at odds with most enterprise prerogatives to 'be multicloud' with respect to sourcing strategies," Gartner said in the report. "Further complicating matters is that the 'best of breed' approach historically used on-premises is treacherous in the cloud, given the dissimilarity in identity systems, resilience characteristics, network latency and general apprehension by the leading providers to work together in the interest of customers."

While we at Virtualization & Cloud Review have noticed a deluge of multicloud advice and reports (see "Cisco Report: Multicloud-Enabled Networks Key to 'Viable Future'") and "Multi-Cloud Is New Normal, Survey Says, but Skills Shortage Persists" for a couple examples), Gartner says that approach is best only for some organizations.

"Ultimately, multicloud architectures are still only suitable for the most sophisticated customers who can deal with the myriad challenges that await," Gartner said.

The research firm went on to describe the market in some surprisingly strong terms, throwing around terms like "strong-arm tactics" and "negative behavior" and "unscrupulous behavior."

Because the report is basically the same old, same old in many ways (see graphics above -- Huawei was added to the mix this year), here we'll focus on Gartner's market overview.

Here are the rest of the research firm's comments about that:

Once enterprises are in the dominion of a cloud provider, it is unlikely that the cloud provider remains benevolent for very long. The ultimate goal of the cloud providers is to move enterprises further up into the PaaS layer where the margins are higher and the ability to extricate workloads and processes become more difficult. But traditional workloads such as those focused on ERP become difficult to move as well due to their mission-critical nature.

The negative consequences of being in the dominion of a cloud provider are already beginning to surface. Gartner client inquiry across a broad array of worldwide regions reveals unscrupulous behavior on the part of the cloud provider once enterprises are fully locked-in.

Some cloud providers use strong-arm tactics to force enterprises into agreeing to increasingly higher committed spend levels. Others use software licensing from an entrenched base of operating system and relational database management system utilization to direct more cloud usage to their respective offerings.

Early indications are that some enterprises are fiercely resisting and are making significant plans for IT supplier diversification as a result. But the complexity and overhead of managing multiple cloud providers, combined with lower discounts due to lower provider commitments, often result in a multicloud strategy increasing TCO, rather than lowering it as desired.

The market for cloud infrastructure and platform service is in play again.

As far as advice, Gartner led off its report with this: "I&O leaders must weave through a perilous environment consisting of increasingly aggressive cloud providers further complicated by rising inflation, competition for cloud talent, regulatory mandates, and security and downtime incidents. Use this research to make strategic cloud provider selections."

The report is available for free in complimentary licensed-for-distribution editions from several of the vendors covered, easily found with a quick web search.