Smaller Cloud Providers Deserve Attention and Scrutiny
Table of Contents
- 1. Smaller Cloud Providers Deserve Attention and Scrutiny
- 2. Understanding the Cloud Landscape
- 3. Why smaller Providers Are Gaining Traction
- 4. The Future of the Cloud Market
- 5. The Rising Significance of ESG and Sustainability in Cloud Computing
- 6. Why ESG Matters in Cloud Purchasing Decisions
- 7. Sustainability as a Top Priority
- 8. Actionable Takeaways for Businesses
- 9. What are the primary factors influencing the decision of SMEs to adopt a “cloud-first” or hybrid cloud strategy?
- 10. How the Cloud Market is Evolving
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Smaller cloud providers deserve analysis and scrutiny
While the “big three” hyperscale cloud providers dominate over 60% of the market, there’s a growing trend of businesses turning to smaller, non-hyperscale providers for their cloud needs.
According to Q3 2024 data, when the hyperscalers are excluded, a notable 39% of the $0.79 trillion cloud market is still up for grabs.This segment is fiercely contested by numerous smaller players. As an example, Alibaba, a Chinese cloud giant, holds a 4% global market share, closely followed by Oracle at 3%.
Other notable contenders include Salesforce, IBM, Tencent, and Huawei, each commanding around 2% of the global market. Beyond these,the competition becomes even more fragmented,with dozens of smaller providers vying for a slice of the pie.
Understanding the Cloud Landscape
Market share analysis is just the tip of the iceberg. the real intrigue lies in understanding how businesses of diffrent sizes and industries are leveraging cloud services. A recent study by the Tech Industry Forum (formerly the Cloud Industry Forum) highlights the surprising popularity of smaller cloud providers, especially among small and medium-sized enterprises (SMEs).
For example,in SMEs with 50 to 249 employees,56% reported using IBM’s cloud services,outpacing Azure (54%),AWS (48%),and Google Cloud (44%). Oracle also made a strong showing, with 26% adoption in this segment. In larger SMEs (250 to 999 employees), IBM’s cloud services were used by 61%, while Oracle’s services were utilized by 41%.AWS and Microsoft, while still prominent, faced stiff competition in these segments.
Why smaller Providers Are Gaining Traction
Smaller cloud providers are carving out a niche by offering tailored solutions that cater to specific business needs. Unlike hyperscalers, which often provide one-size-fits-all services, these providers focus on adaptability, customization, and personalized support. This approach resonates particularly well with SMEs, which often require more hands-on assistance and cost-effective solutions.
Moreover, smaller providers are often quicker to adopt emerging technologies and integrate them into their offerings. This agility allows them to stay competitive and meet the evolving demands of their clients.
The Future of the Cloud Market
as the cloud market continues to expand, the role of smaller providers is likely to grow. Businesses are increasingly recognizing the value of diversifying their cloud strategies, combining the strengths of hyperscalers with the specialized services of smaller players. This hybrid approach not only enhances operational efficiency but also mitigates risks associated with vendor lock-in.
while the hyperscale giants dominate headlines, smaller cloud providers are proving their worth in the competitive landscape. By offering innovative, flexible, and customer-centric solutions, they are reshaping the way businesses think about cloud adoption.
David Terrar, CEO Tech Industry Forum
In the ever-evolving world of cloud computing, businesses are increasingly adopting hybrid strategies to balance flexibility, cost, and performance. According to recent research, nearly half of organizations are embracing a “cloud-first” approach, while an equal number are opting for hybrid solutions. This trend reflects the growing recognition that not all workloads are suited for hyperscale cloud environments.
David Terrar, CEO of the Tech Industry Forum, emphasizes the importance of tailoring cloud strategies to specific needs. “49% of the respondents this year had a cloud-first strategy, and 49% had a hybrid approach,” he notes. “For me, that makes sense because it’s all about the particular characteristics that you’re after. Maybe you develop using OpenStack or a similar approach whereby you can easily migrate from one platform to another. Lock-in, in its various forms, has always been there. I don’t see that as a big thing to be worried about. It’s more a matter of choosing the right platform for the particular work.”
The dominance of major players like AWS and Azure is well-documented, but the landscape is far from monolithic. Google Cloud, for instance, holds a significant share, while other providers like IBM, Oracle, OVH Cloud, and Lenovo are carving out their niches. Terrar observes, ”The complexity of the big three and their platforms, with so manny features and functions, is driving companies to explore other options. It doesn’t surprise me that IBM and Oracle are gaining traction, alongside others like OVH Cloud and Lenovo. There are sensible alternatives available.”
This diversification is particularly evident in mid-sized enterprises, where Salesforce cloud services are used by 25% of respondents. While AWS and Azure remain dominant, with 51% and 41% adoption rates respectively, Google Cloud is steadily consolidating its position at 38%. These figures highlight the nuanced dynamics of the cloud market, where no single provider can meet every need.
Terrar’s insights align with broader industry trends, underscoring the value of a hybrid approach. “Not every workload belongs in a hyperscale cloud,” he explains. “Concerns about vendor lock-in are frequently enough cited as a reason for adopting a blended strategy,but it’s just one factor among many. The key is to choose the right platform for the specific task at hand.”
As businesses navigate the complexities of cloud adoption, the importance of flexibility and strategic planning cannot be overstated. whether opting for a cloud-first or hybrid model, the goal remains the same: to leverage the best tools and platforms to drive innovation and efficiency.
The Rising Significance of ESG and Sustainability in Cloud Computing
in today’s rapidly evolving business landscape, environmental, social, and governance (ESG) factors are no longer just buzzwords—they are critical considerations for companies of all sizes. When it comes to cloud computing, sustainability is increasingly influencing purchasing decisions, reshaping how businesses evaluate their technology partners.
Why ESG Matters in Cloud Purchasing Decisions
Recent research highlights the growing importance of ESG and sustainability in the cloud industry. As an example, 84% of businesses with 50 to 249 employees consider ESG factors extremely or very crucial when selecting a cloud provider. this figure jumps to 94% for companies with 250 to 999 employees. Even more striking, 63% of these businesses would reject a vendor if their ESG or sustainability practices fell short.
While factors like cost, service offerings, and vendor relationships still dominate decision-making, sustainability is steadily climbing the ranks.It’s no longer a niche concern but a mainstream priority, especially as smaller organizations begin to embrace ESG reporting. Traditionally, only Fortune 500 companies were expected to disclose such data, but this expectation is shifting. Mid-market enterprises are now recognizing the value of transparency and accountability in their operations.
“It’s much higher in the buyer’s mind than you might expect,” says Terrar. “The realization that sustainability is crucially critically important is one of the strongest things that comes out of the report, and I’m hoping that companies do start to report more on ESG.”
Sustainability as a Top Priority
This shift aligns with broader trends in technology purchasing. Last year, sustainability emerged as one of the top three priorities for decision-makers, driven by a demand for better-quality, comparable data.this push for transparency has spurred increased research into the environmental impact of cloud providers, with a focus on metrics like carbon emissions, water usage, and circular economy practices.
Over the past two years, research has primarily centered on the “big three” cloud providers. though, the scope is expanding. This year, analysts aim to include other major players like Oracle, Salesforce, IBM, and OVH Cloud in their evaluations.this broader approach reflects the growing recognition that sustainability is a collective responsibility, requiring collaboration across the industry.
Actionable Takeaways for Businesses
For companies navigating the cloud market, here are some key considerations:
- Prioritize ESG Reporting: Ensure your institution is clear about its sustainability efforts, as this can influence vendor selection and stakeholder trust.
- Evaluate Vendors Holistically: Look beyond cost and services to assess a provider’s environmental impact and commitment to sustainability.
- Stay Informed: Keep up with industry research and trends to make data-driven decisions that align with your ESG goals.
As the demand for sustainable cloud solutions grows, businesses that prioritize ESG will not only gain a competitive edge but also contribute to a more sustainable future. The message is clear: sustainability is no longer optional—it’s essential.
What are the primary factors influencing the decision of SMEs to adopt a “cloud-first” or hybrid cloud strategy?
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How the Cloud Market is Evolving
By David Terrar, CEO of the Tech Industry forum
In the ever-evolving world of cloud computing, businesses are increasingly adopting hybrid strategies to balance flexibility, cost, and performance. According to recent research, nearly half of organizations are embracing a “cloud-first” approach, while an equal number are opting for hybrid solutions. This trend reflects the growing recognition that not all workloads are suited for hyperscale cloud environments.
As businesses navigate the complexities of cloud adoption, the importance of flexibility and strategic planning cannot be overstated.whether opting for a cloud-first or hybrid model, the goal remains the same: to leverage the best tools and platforms to drive innovation and efficiency.
