In recent years, rapid developments in the cloud sector made cloud consolidation possible, a trend that businesses need to take into account when investing in cloud-based technologies.
What is cloud consolidation?
A few years ago, major cloud players like Google, Amazon, and Microsoft began to expand and offer a greater variety of services. Amazon Web Services (AWS), for instance, focused on cloud storage and virtual machine instances when it launched in the mid-2000s. Today, it offers a diverse range of services that include robotics, cybersecurity, augmented reality (AR) and virtual reality (VR), and even blockchain technology.
These expansions came at a cost. The major players began eating up smaller specialty providers, either by buying them out or driving them out of business. Having fewer, albeit bigger, names in the market came with benefits, of course.
In particular, fewer options meant consumers looking to migrate their data to the cloud didn’t have to look far. And because these brands have essentially become one-stop shops for cloud-based solutions, consumers had access to solutions that were tailored to their needs without having to deal with multiple vendors.
Conversely, this consolidation of cloud providers increases the risk of customer lock-in. Once you’ve signed up, large providers may not give you the option to skip updates or save money by turning to third parties for maintenance. They can also raise their prices as they capture a greater share of the market. You can’t just stop paying for the service once it gets too pricey either, lest you lose access to your data.
Furthermore, some experts fear that consolidation is creating a homogenous market that does not foster innovation. As big players consolidate, they could reduce their investments in research, hampering the development of better cloud solutions available to consumers.
As a business owner, what are your takeaways?
Consolidation has positive and potentially negative consequences. If you want your business to thrive amidst this trend, you need to keep these in mind:
#1. Consider more than money when choosing a provider
Many smaller cloud providers survived over the years by offering their products at a fraction of what major players charge. If you’re a small business looking to upgrade to the cloud but do not have a lot of money to do so, this might prove extremely tempting.
Consolidation may make it risky to invest in products from small cloud providers. After all, there’s always the possibility that a larger provider will take over. This isn’t to say that you absolutely must not choose less-known names. Many are doing well given the circumstances and are offering solutions designed to offer great results to their intended customers.
#2. Not all cloud services are forever
That said, it’s also important to note that even big players are not guaranteed to hold their current position for life. They may shut down one or two of their services in the future or lose their place to a more innovative brand. In any case, you wouldn’t want to be stuck in a contract with your provider while better options are springing up in the market.
It is, therefore, important to do your research before deciding about your cloud investments. Weigh your options and the probabilities and your business will be better protected from the risks of cloud consolidation.
#3. It may be time to consider going multi-cloud…
Another strategy to protect your business from the risks of consolidation is by opting for a multi-cloud setup. Even if one of the clouds were to close or be taken over, your data will remain intact and you will still have access to it.
A multi-cloud setup is great for cybersecurity too, which is something you must always be mindful of considering the ever-present risk of a cyberattack. Spreading your data across disparate systems ensures that common threats like ransomware will not impede your operations.
#4. …Or using a private cloud
If you have the means, you can opt to create a private cloud by using platforms like OpenShift. A private cloud is exactly what its name implies — it’s your very own cloud storage. It offers most of the benefits of conventional cloud platforms but gives you better control over maintenance and security.
Cloud consolidation may be less than ideal, but it is a reality that you must account for when planning or deciding for your business. If you want to learn more about the possible impacts of cloud technology on your business, read our eBook now.
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