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. This means they are also subject to the conditions of the chosen cloud provider.
The fact that the decision for a cloud provider may be questioned from time to time is particularly evident in times of change. Today, the pursuit of digital sovereignty, as well as regulatory requirements, changed demands on operations and support, and rising costs, lead companies to review the existing implementation of their cloud strategy. The collaboration with the current provider also comes into focus.
Switching cloud providers can be a sensible step in the modernization of one’s IT landscape. But what are the reasons that lead companies to reconsider their choice of cloud provider?
Digital Sovereignty
How important it is to become independent of solution providers operating outside the European legal area is more obvious today than ever: unpredictable geopolitical events are almost commonplace.
European companies and authorities have learned that they are better off not entering into a self-imposed dependency on US providers. While hyperscalers offer an unbeatably broad service portfolio, no company readily relinquishes control over its own data, trade secrets, and infrastructure if the cloud partner is subject to laws with such far-reaching access rights as the CLOUD Act.
Digital Sovereignty vs. Data Sovereignty
Digital sovereignty is far more than mere 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 – Claim, Reality, and Sovereignty Washing“).
Regulatory Requirements
The conflict between regulations such as the US CLOUD Act or the Patriot Act and European data protection regulations has led many companies to increased sensitivity in dealing with cloud infrastructures. Requirements from GDPR, BDSG, industry-specific regulations, and data location requirements play a role. Especially in highly regulated industries or when dealing with sensitive data, this creates a need for clear, legally sound operating models.
Regulations such as ISO 27001 influence the choice of provider. Depending on the industry, companies must demonstrate that their cloud infrastructure meets specific security and compliance standards. This is an area where not every provider offers the necessary transparency or depth of certification.
Vendor Lock-in
Unilateral price increases, expensive licensing models, or short-term product discontinuations, such as those that caused an uproar during Broadcom’s acquisition of virtualization provider VMware, now lead companies to avoid firm ties to a single 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 have today.
Moreover, with proprietary providers, vendor lock-in can quickly become a cost trap:
Costs
The term vendor lock-in has gained widespread recognition at least since Broadcom’s acquisition of VMware: companies today shy away from this long-term, firm commitment to a single provider. Because, in addition to the lack of open source, no company unnecessarily exposes itself to the arbitrary pricing structure of a single provider. Due to market developments and a strengthened diversity of providers in the cloud sector, companies today have a much wider choice: accordingly, their control over cost development is higher.
Cost Structure and Control
The cost structure of cloud usage itself is also a relevant factor in choosing a provider. Consumption-based billing models offer flexibility but often complicate budget planning. Additional costs for data traffic (egress, between availability zones), storage classification, or unpredictable technical factors (IOPS, requests, API calls, and pipeline runs) contribute to a lack of transparency.
In certain use cases, unforeseen load peaks or unoptimized workloads can lead to significant cost increases. However, companies want predictability and clear cost control, which is why they prefer more attractive alternatives.
Furthermore, the Total Cost of Ownership should not be underestimated: it quickly increases with operation and support by qualified personnel. This also makes it a factor for companies that can lead to a cloud provider switch.
Customer Proximity
Multi-cloud management is complex and increases the need for support for many companies. Especially if there is only a small IT department, companies are well aware of the associated operational challenges. Different platforms, tools, and operating models require in-depth know-how and additional FTE resources. Monitoring, automation, governance, and security must be implemented across platforms, which entails an effort that not every company wants 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 only an infrastructure provider but a partner with expertise and personal accessibility is needed. A good cloud partner offers best practices and also minimizes the risk of losing its own well-trained personnel due to fluctuations in the labor market in times of skilled labor shortages.
Modernization
The modernization of the system landscape does not always only encompass one’s own IT. For SaaS providers, for example, the provision of solutions and services to their own customers is usually also the goal of modernization measures. Cloud-native architectures, container technologies, standardized interfaces, and a high degree of automation are often on the wish list to efficiently develop and operate applications.
However, many existing cloud environments are only partially suitable for this, either technically or organizationally: for example, due to proprietary platforms, missing Kubernetes support, or limited integration options. A powerful 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.
