Historically, companies managed and operated all their data, systems, and applications on their own servers. Then one day the earth shook and cloud computing was born and changed the game. With the emergence of cloud computing, came cloud service providers (CSPs) who saw the opportunity to make a difference (and a little $$$) by hosting and running a company’s applications on remote servers.
By utilizing the necessary computing power and storage to meet demand, CSPs rewrote the rules on how things were done. The CSPs approach led to more cost-effective and faster computing as their model eliminated the need for companies to purchase, install, and maintain costly servers. Companies were no longer burdened to purchase servers, update applications or operating systems, or handle the decommissioning and disposal of outdated hardware or software, as these tasks were now managed by the cloud service providers.
According to a Gartner report (because we all look at Gartner reports), by 2025, up to 50% of spending on application software, infrastructure software, business process services, and system infrastructure markets will have transitioned to the cloud, an increase from 41% in 2022. Additionally, Gartner estimates that two-thirds of spending on application software will be through cloud computing, rising from 57.7% in 2022.
In the first quarter of 2024, Amazon Web Services (AWS) led the cloud infrastructure services market with a 31% share. Microsoft Azure followed with a 25% share, and Google Cloud held 10%. With these three titans leading the charge, the global cloud market surged to a record $76 billion, collectively the big three captured 67% of the market share.
“Amazon held steady relative to the prior quarter, while Microsoft and Google both saw a marginal increase,” said John Dinsdale, a chief analyst at Synergy Research Group, in an email to CRN. “All three saw their growth rates increase substantially in the last two quarters.”
CSPs provide a vast array of services that can be bucketed under three main categories, broadly speaking:
- Infrastructure as a Service (IaaS)
- Includes resources like compute, networks, storage, data management, virtualization, and operating systems
- Platform as a Service (PaaS)
- Includes the computing infrastructure for the platform and runs the cloud software that provides the components of the platform, such as the runtime software execution stack, databases, and other middleware components
- Software as a Service (SaaS)
- Includes ready-to-use applications and is responsible for maintaining and managing everything, from hardware and maintenance to development, scaling, and delivery
CSP challenges:
- Integration
- Connecting legacy systems with cloud applications can be challenging
- Security
- Self-explanatory – think, hackers and such doing nefarious things
- Compliance regulations
- Varies from geographic locations
- Data Lock-In
- Different vendors utilize different data formats
The complication of who to partner with is a challenge as each provider offers robust functionalities to help future-proof an organization. Due diligence and prequalification become important, as in marriage, long-term commitments are an investment, and getting a “divorce” can be costly. Below is a brief comparison of the Top 3 CSPs:
- Amazon Web Services (AWS) is the leading provider in the commercial cloud computing market.
- Microsoft Azure, the closest competitor, is renowned for its seamless integration with other Microsoft products and services.
- Google Cloud Platform (GCP), holding the third-largest market share globally, excels in big data and machine learning.
The Big 3 Comparison:
So, what should be considered when choosing the right provider for long-term success? Here are 7 factors to be considered:
- Current Infrastructure: If your existing infrastructure is primarily Microsoft-based, Azure cloud computing is an excellent choice. However, for other scenarios, any of the three major providers—AWS, Azure, or Google Cloud—can meet your needs. AWS excels in large-scale deployments with complex requirements, while Google Cloud is exceptional in big data, AI, and machine learning. For hybrid cloud solutions and seamless Microsoft integration, Azure is the leader. Ask yourself: how can a CSP fit into your current landscape and enhance it?
- Budget: When it comes to budget, GCP is often considered the most cost-effective solution of the big three. However, the most economical option ultimately depends on your specific needs, and any of the three providers—AWS, Azure, or GCP—could be the best fit.
- Security Requirements: Both Azure and AWS effectively manage security needs in hybrid cloud environments. AWS excels at handling complex security requirements across various environments.
- Scalability: For scalability, AWS stands out, thanks to its vast infrastructure.
- Ease of Use: AWS can be more challenging to learn due to its extensive range of services, while GCP offers a more user-friendly interface. Azure falls somewhere in between, and it’s particularly accessible for those already familiar with Microsoft products. Accept the fact that there will always be challenges but with the right partner, all obstacles can be overcome.
- Support: All three providers offer multiple support levels. A deeper dive is needed into the support tiers that are aligned with your organizational requirements.
- Long-Term Partnership: When choosing the right fit, understand that the investment in funds, time, and effort is no small task. Proper upfront vetting can save a lot of heartache down the road…unless you are one of those organizations that like/live for drama, in which case, seek therapy.
The cloud market is expanding, and while the big three dominate, emerging players are making significant strides. Although cloud providers offer similar functionalities, the subtle differences in their offerings can determine the best fit for your organization. Selecting the right partner for long-term growth is crucial for successful adoption.
So, get that checklist out and qualify the partner that most strongly aligns with your current requirements and future aspirations. Weirdly, this type of qualifying sounds like dating… if only there was an app for this, a Tinder for CSP: Coffee meets CSP…
For more information on how our procurement consultants can help your business address the challenges of changing technologies, and understand best practices in cloud adoption, get in touch now.
