Ongoing change is the very fabric of cloud technologies. Things are already building up toward another change-filled year, and the first rift in the status quo just emerged as a mega-merger between Hostway and Hosting, two well-known cloud service providers, is showing how customer demands can once again change the cloud landscape.
The mega-cloud wars are common knowledge throughout the tech industry. Even among the general public, it is difficult to miss television commercials for major cloud platforms during major televised sports events. From leaders to contenders in the cloud space, vendors dictate the technology landscape with ever-evolving technologies and adoption strategies. Amazon’s AWS and Microsoft’s Azure cloud services rule the land with more than $50 billion of combined revenue (over a recent 12-month period). Behind them, Google, Alibaba, and a handful of other providers compete for single-digit market share growth. The cloud giants continue to duke it out for ultimate supremacy as they grab major industry news attention.
Choice and flexibility
When you check out the above graphic, take a look at the “Rest of Market.” At first glance, things look bad for this group. It appears as though smaller, ultra-regional cloud and hosting providers are looking doom straight in the eyes. Mega-clouds continue to grow and evolve at a frantic pace, so how can anyone begin to compete?
The answer is that this is a shared ecosystem. And it turns out that one-stop mega-clouds may not be for everyone. Called to comment on this story, an energy technology executive shared this: “We want to right-size our cloud partnerships as much as we need to right-size our cloud environments, with the best of all possible worlds, in more than one basket, and security is imperative.”
That statement is indicative of several market undercurrents. Facing an ever-increasing number of technology options, a shortage of qualified and experienced talent, pressured by a competition where technology is looked to provide an attainable edge, customers are looking for choice, support, but also maximum impact and flexibility. That’s where hybrid and multicloud are providing the best possible solutions. It explains why AWS is changing into an enterprise-focus with hybrid technologies. That’s a lot of technologies, a lot of choices, too many in fact for many organizations to undertake or consider. Opportunities for missteps and failure abound. Once we dig into the details, the “Rest of Market” is responding by driving clients to the mega-clouds, as stewards of cloud capabilities, combining this expertise with service, support, and hybrid solutions.
Hybrid, multicloud, and partner clouds are best
Cloud and hosting providers have figured out that the path to customer’s ultimate needs is best served by building the best possible cloud environment, incorporating everything that client environments need, including driving clients towards major cloud platforms. A quick review of sites belonging to several smaller hosting companies shows that a majority either touts or mentions major cloud partnerships with Google, AWS, and Microsoft Azure as part of their solution offerings.
Many IT departments remain in the first phase of cloud adoption — virtualizing datacenters and adopting IaaS. Until the cloud adoption curve begins to slow down, this remains one of the most significant cloud opportunities of the day. You see, as leases expire and hardware/software cycles requires refresh, early-phase IaaS cloud adoption (and shifts in IT principles) continue to be a catalyst for cloud-based IT change, driving efficiencies and operational savings along the way.
A significant chunk of clients is sure to look beyond the simple cloudification of existing infrastructure. Security, scalability, availability, AI, mobility, code deployment, and an entire world of enhanced cloud options are readily available in the cloud. Each of these cloud-attainable features can present a transformational opportunity for the client that has an aligning vision or need. Hybrid and multicloud deliver the method through which the integrity and efficiency of corporate computing are assured.
If that all sounds like a lot, it is! Business transformation through technology is a monster, especially with the challenges of talent and competition that face modern companies. This explains how accessible and experienced hosting companies have changed in the wake of customer needs, serving as trusted advisors and curators of cloud technologies.
Mergers signal a coming trend
Over the years, Hostway has cast one of the largest, unheralded shadows in the hosting business. Aligned with numerous significant ISPs, and local telecoms, it is a silent giant that powers email, shared platforms, and Internet activity across the country. Cloud industry pioneer CEO Emil Sayegh took the reins in late 2016, moving the company in a decidedly cloud-oriented direction, with a focus on secure, compliance-oriented solutions based on hybrid cloud deployments. Based out of Denver, Hosting has a similar history. Soon to be operating under the Hostway brand alone, the combined organization has 14 world-class datacenters in five countries across three continents. Choice. Scale. History. These features make it easy to see what Hostway is seeing in customer needs and how they plan to deliver.
An end to a battlefront in the mega-clouds price wars
Somewhere in the subtleties, there’s a bit of contrast at hand. It was not so long ago that cloud mergers and acquisition activities focused on net new customers above all else. We witnessed an age of price wars, built on massive commoditized datacenters and facilities in a race to the bottom price. Merger strategies were more about a race for valuable space than anything else. The cloud market is maturing with collaborative client partnerships and mergers shifting strategies to a solution provider model.
Hybrid and multicloud solutions are the foundation of this evolving market opportunity and changing cloud landscape. By aligning with and serving as gateways with the mega-cloud providers, other well-known cloud brands are beginning to leverage new and existing hosting clients into dynamic hybrid cloud environments. Further, some organizations are taking the reins of ongoing cloud design, maintenance, and management on behalf of their customers in managed cloud service offerings. The proposition is simple — the customer just maps out what they want, and the provider delivers, including architecture, design, planning, security, integration, and ongoing maintenance. Searching for leadership and talent is no longer the concern for the client. Suddenly, technology missions such as IoT, machine learning, scalable and global infrastructure, along with many other business advantage technologies are within reach.
Managed cloud service providers for a new cloud landscape
Due to the needs of the market, the wealth of technology out there, and the lack of available experience and skills, the services of IT professionals appear to be the next wave of commoditized assets. The advantages of near-limitless cloud technologies coupled with business goals and dreams are proving to be a potent match and compelling business story. The question is whether this services wave will fizzle quickly or go on a similar decade-long run.
Regardless, it would be foolish to predict that a new, emerging mega-cloud provider may not come in our lifetimes, but it doesn’t appear likely, especially considering the current cloud landscape. Brands have surely come and gone, but it is more likely a scenario where customer needs and choice continue to change the market itself. In this time and place, that force driving a big chunk of the market is shifting relationships with hosting and cloud services. 2019 is destined to be a year of continued mergers and acquisitions along the terms of customer demands for greater cloud technologies, delivering on choice, access to a global scale, and flexibility. It doesn’t need saying, but the mega-clouds will continue to grow thanks to an ecosystem of partnerships and flexible solution providers.
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