Why more Organizations are Moving Away from the Top 3 Public Cloud Providers

Why more Organizations are Moving Away from the Top 3 Public Cloud Providers

As the cloud computing market matures, more and more organizations realize that the top three public cloud providers may not be the best fit for their environments.

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This was highlighted in a new study published yesterday by Techstrong Research and Linode, which shows that while 93% of organizations use the top three cloud service providers: Amazon Web Services, Microsoft Azure, and Google Cloud Compute, nearly two-thirds are considering In or ready to buy from a trusted alternative cloud provider.

In other words, the bubble of the big three public cloud providers is bursting, and companies are looking for more flexible and cost-effective alternative cloud solutions.

What drives the appetite for the alternative cloud?

While alternative cloud service providers such as Linode date back to 2003, it is only in the last few years that alternative cloud adoption has gained momentum.

In the last four years, the adoption of alternative cloud solutions has nearly doubled to the point where 27% of organizations now use an alternative cloud provider, such as Akamai’s Linode, DigitalOcean, or OVHcloud.

Although there are many reasons for this increase in adoption, at a high level, organizations are turning to the alternative cloud to improve operational flexibility, allowing them to create multi-cloud environments that meet exact business needs rather than the “best solution.”

“The main benefits of an alternative public cloud are cost, performance, availability, security, and agility for the business. Some organizations struggle with the complexity of hyper-scale providers,” said Blair Lyons, chief experience officer at the akamai cloud

“So when choosing an alternative cloud service provider, the benefits come with an ‘add and subtract’ approach. Alternative cloud providers provide greater simplicity for user interface, catalog and pricing, and a more manageable learning curve,” Leon said.

The alternative cloud allows organizations to simplify their cloud infrastructure while allowing developers to deploy and manage multi-cloud environments with access to open APIs.

At the same time, moving away from the big three cloud providers also provides a boost in profitability.

“Pricing is less complicated and less expensive for an enterprise use case, and often more services can be offered or bundled with the base offering that the super broad provider doesn’t offer. In addition, developers are looking for more flexibility in how they pay for their cloud services (Google Pay, Apple Pay, encryption, etc.), and broadband providers are much stricter with their payment methods,” said Leon.

Alternative Cloud Market

As the alternative cloud market matures, several significant providers dominate, including Akamai’s Linode, Digital Ocean, and OVHcloud. One of the main competitors in the market is Linode, which was acquired by Akamai Technologies Inc. for $900 million earlier this year.

Linode is positioned in the market as an alternative to AWS, giving businesses access to Linux cloud resources with a full-featured API and cost-effective pricing options. It also has more than a million customers.

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One of its main competitors, DigitalOcean, recently announced that it brought in $127.3 million in revenue in the first quarter of 2022, a 36% increase from last year.

DigitalOcean positions itself as the “developer’s cloud” and offers a suite of solutions, including scalable virtual machines, managed Kubernetes clusters, and serverless computing solutions designed to help developers develop applications more efficiently.

OVHcloud also plays an essential role in the market, offering a combination of bare metal cloud, hosted private cloud, and public cloud services, providing companies with access to high-performance dedicated servers. OVHcloud recently announced that it collected €202 million ($203 million) in revenue in the third quarter of 2022.

The main difference between these offerings and the solutions offered by AWS, Azure, and Google Cloud is that these solutions provide high performance at a lower price. That makes it a more cost-effective solution for business users.

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