The cloud business model is evolving, with less focus on existing enterprises moving their business to the cloud and more focus on movement among cloud vendors. It's important not to miss this trend as people continue to debate public, private, and hybrid clouds.

What's happening in cloud computing?

There have been a number of high-profile announcements in the cloud space in the last few months.

  • Spotify announced that it is moving its core infrastructure to Google from Amazon Web Services (AWS).
  • Dropbox has left AWS for a private solution.
  • Salesforce has expanded its relationship with AWS, moving more of its infrastructure to AWS datacenters from their own.

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The few migrations away from AWS doesn't seem to have done Amazon much harm, because it recently announced that it now has nearly 1 million users, and its cloud business is generating about USD 10 billion in revenues annually.

Announcements about moves to or from public and private cloud platforms generate a lot of commentary. "Public versus private cloud" is good for over 8 million hits on Google. And, again, let's not forget about hybrid cloud. Which is better can be an interesting debate. However, you don't want to overlook that this movement between different cloud providers and approaches is a sign of an industry that is growing up.

The recent history of cloud computing

It was not too long ago that in large enterprises, the use of public cloud services was often something for shadow IT or "skunkworks" projects. Today 93 percent of businesses report using the cloud and 82 percent have a hybrid cloud strategy. Almost everyone accepts that the benefits of flexibility, efficiency, responsiveness, cost, and elasticity are worth the disruption and effort that transitioning to the cloud entails. Enterprises are making the move wholesale, and generating a huge amount of new business for cloud infrastructure and cloud service providers.

The ones farthest along this path are the digital-native companies, the ones that grew up on the cloud and demonstrated that you could build multi-billion dollar companies on such shared infrastructure. As their businesses have matured, and as their technology has developed, they are now questioning both the approaches and the vendors they have used in the past.

Churn enables service model evolution

Cloud vendors see this. And they also see that enticing existing cloud users to swap is a promising source of revenue in both the public and private cloud arenas. In the short term, this will not be something that is easy to measure in cash terms. But we can expect to hear about more and more about companies jumping providers or changing focus from one type of hybrid solution to another.

This is part of the promise of cloud: vendor lock-in is reduced, and the cloud enables a greater degree of flexibility in the solutions and technology approaches that you can adopt.churchill.jpg

We can see that the cloud market is changing. It has some way to go before anyone could describe it as mature—when growth and innovation tapers off, and the focus has shifted to consolidation. But it is one market that is growing up. This is - to paraphrase Winston Churchill - the end of the beginning for the cloud business model.

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Seamus Keane

Seamus started his professional career manufacturing skincare cream, but rapidly moved on to working in IT development, project delivery, consulting, and strategy development for communications and high tech industries around the globe. He has been working on Cloud technology for Ericsson for the last four years. He is amazed every day by how much fun it has been.

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