The Dangers and Consequences of Depending on a Single Cloud Provider

Companies are aware of the dangers of relying on a single cloud provider. By 2027, half of all business-critical applications will be hosted outside of the public cloud.

Being dependent on a single cloud operator can pose difficulties. Companies even consider this dependency to be one of the five biggest risks they are currently exposed to, as a study by market researcher Gartner shows. “Many organizations today find themselves in a situation where they would face severe disruption if a single provider were to fail,” said Gartner Research Director Ran Xu.

In 62 percent of companies, dependency is becoming a generally recognized problem. This means that it is now almost as important as the possible danger posed by delivery failures (73 percent), socio-political developments (69 percent) or AI (68 percent). In addition, dependence is a more prominent risk than that associated with compliance with various conflicting regulations (59 percent).

A small number of cloud providers currently dominate the regional and global market. They owe their pioneering position to their own technical expertise, their partner system and their business reach. “For organizations that have chosen to host their IT services on public clouds, there are not many obvious ways to avoid concentration risks while reaping the benefits of cloud services,” says Xu.

Consequences of a one-sided dependence on the cloud provider

Companies that rely on only one cloud provider do so to reduce IT complexity, costs and skills requirements. However, such a dependency leads to the following problems in particular:

1. Anyone who makes their business processes dependent on a single supplier cannot compensate for the potential effects of a failure.
2. Such dependency limits technological alternatives. In addition, cloud providers could have a strong influence on the company’s technological development.
3. Companies may not meet the regulator’s requirements regarding default risk.

Interest in private clouds is increasing

Gartner forecasts also show that half of critical enterprise applications will not be hosted in public clouds by 2027. The reason for this is, among other things, the difficulty of choosing the optimal provider for your own company needs. Many enterprises would look for cloud-inspired solutions for existing on-premises workloads such as business-critical applications and general purpose workloads.

The market researcher advises considering setting up a private cloud. Companies should not expect that they can completely free themselves from hyperscalers. “Enterprises need hybrid capacity and that will always be the case. While public clouds offer many benefits such as innovation, agility and scalability, their usefulness can be limited when deployed outside of the locations chosen by public cloud providers,” explains Dennis Smith, an analyst at Gartner.

Also read: The Danish cloud provider Cloudnordic has fallen victim to a cyber attack. The company lost a large part of its customer data. The attack probably took place as part of a server move.