Rethinking your choice of cloud provider can be a sensible step in the course of modernizing your own IT landscape. What are the most important motivations for a switch?
Cloud infrastructures have long been an integral part of the IT landscape for most companies. Applications, data, and business processes are increasingly located in external environments. As a result, they are also subject to the terms and conditions of the chosen cloud provider.
The fact that the choice of a cloud provider should be questioned from time to time is particularly evident in times of change. Today, the pursuit of digital sovereignty, as well as regulatory requirements, changing demands on operations and support, and rising costs, are leading companies to review the existing implementation of their cloud strategy. In this context, the collaboration with the current provider also comes into focus.
Switching cloud providers can be a sensible step in the course of modernizing your own IT landscape. But what are the motivations that prompt companies to rethink their choice of cloud provider?
The importance of becoming independent of solution providers operating outside the European legal framework is more obvious today than ever: unpredictable geopolitical events are almost a daily occurrence.
European companies and authorities have learned that they fare better if they do not enter into a self-imposed dependency on US providers. While hyperscalers offer an unbeatably broad service portfolio, no company lightly relinquishes control over its own data, trade secrets, and infrastructure when the cloud partner is subject to laws with such far-reaching access rights as the CLOUD Act.
Digital sovereignty is much more than pure data sovereignty: it describes an organization’s ability to design and operate digital infrastructures and services independently, securely, and without critical dependencies on individual providers or third countries. In addition to control over data, this also includes technical standards, architectures, source code, and decision-making processes. Only the interplay of these aspects enables fully self-determined digital value creation (cf. “Digital Sovereignty – Aspiration, Reality, and Sovereignty Washing”).
The conflict between regulations such as the US CLOUD Act or the Patriot Act and European data protection requirements has led to increased sensitivity in many companies regarding the handling of cloud infrastructures. Requirements from GDPR, BDSG, industry-specific regulations, and specifications regarding data residency play a role here. Particularly in highly regulated industries or when handling sensitive data, this creates a need for clear, legally robust operating models.
Requirements such as ISO 27001 influence the choice of provider. Depending on the industry, companies must prove that their cloud infrastructure meets certain security and compliance standards. This is an area where not every provider offers the necessary transparency or depth of certification.
Unilateral price increases, expensive licensing models, or short-notice product discontinuations—such as those that caused uproar during Broadcom’s acquisition of virtualization provider VMware—lead companies today to avoid tight binding to a provider, known as vendor lock-in. Proprietary services, APIs, or operating models can make leaving a provider complex and costly, thus contradicting the demand for flexibility and planning freedom that companies require today.
Furthermore, with proprietary providers, vendor lock-in can quickly become a cost trap.
The term vendor lock-in has gained widespread recognition at the latest since the Broadcom acquisition of VMware: companies today shy away from this long-term, fixed commitment to one provider. Besides the lack of open-source options, no company unnecessarily exposes itself to the arbitrary pricing structure of a single provider. Due to market developments and a strengthened variety of providers in the cloud sector, companies today have a much larger choice: accordingly, their control over cost development is higher.
The cost structure of cloud usage itself is also a relevant factor when choosing a provider. While consumption-based billing models offer flexibility, they often complicate budget planning. Additional costs for data traffic (egress, between availability zones), storage classification, or poorly predictable technical factors (IOPS, requests, API calls, and pipeline runs) contribute to a lack of transparency.
In certain use cases, unforeseen load peaks or non-optimized workloads can lead to significant cost increases. However, companies want predictability and clear cost control, which is why they prefer more attractive alternatives.
The Total Cost of Ownership should also not be neglected: it rises quickly with operations and support provided by qualified personnel. As a result, it is also a factor for companies that can prompt a switch of cloud providers.
Multi-cloud management is complex and increases the support requirements for many companies. Especially when only a small IT department is available, businesses keep a close eye on the associated operational challenges. Different platforms, tools, and operating models require in-depth expertise and additional FTE resources. Monitoring, automation, governance, and security must be implemented across platforms, which represents an effort that not every company is willing to undertake.
The anonymous self-service portals of hyperscalers offer neither customer support nor best-practice knowledge. Therefore, awareness has grown in many companies that not just an infrastructure provider is needed, but a partner with expertise and personal accessibility. A good cloud partner provides best practices and also minimizes the risk of losing well-trained personnel due to labor market fluctuation amid the skilled worker shortage.
The modernization of the system landscape does not always just involve one’s own IT. For SaaS providers, for example, providing solutions and services to their own customers is also usually the goal of modernization measures. The wish list then often includes cloud-native architectures, container technologies, standardized interfaces, and a high degree of automation in order to develop and operate applications efficiently.
However, many existing cloud environments are only suitable for this to a limited extent technically or organizationally: for example, due to proprietary platforms, lack of Kubernetes support, or limited integration options. A high-performance cloud provider can specifically provide modern technologies, simplify development and operational processes, and thus realize concrete advantages in performance, scalability, maintainability, and time-to-market.
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