Remember when IBM ruled supreme in hardware services? In the post war period, you couldn’t walk into a corporate data centre without seeing the IBM logo printed on the surfaces of almost every machine in the vicinity, writes David Friend, CEO & Co-founder, Wasabi Technologies.
At its peak in 1985, IBM had more than twice the market value of its closest share price competitor oil company ExxonMobil, and they’d been around since the 1920s.
Then, along came EMC in the 70s. EMC’s introduction of disk storage devices that allowed integration with IBM’s standard offered better performance at a fraction of IBM’s price. Of course, this threatened IBM’s bottom line – why wouldn’t you buy cheaper data storage at a time where the costs were extortionate? The only reason you wouldn’t would be the risk of doing business with a relatively unknown quantity – as the famous adage went: “Nobody ever got fired for buying IBM”.
However, it didn’t take long for people to catch onto the benefits. EMC ultimately destroyed IBM’s credibility in the disk storage space and anticipated the eventual fall of its house of cards. Ultimately no matter how big you are, no matter how many great engineers you employ, no company can be the best at everything.
Over the next 20 years in the hardware industry, proprietary interfaces morphed into ‘de facto’ standards which were plug-in compatible with the big vendors. The industry turned to best-of-breed specialists – we say HP specialise in printers, Intel in CPUs, Cisco and Juniper in networking gear, and so on… Similarly, the modern data centre is currently abrim with dozens of different brands and vendors.
However, monopolies are still trying to form in the cloud storage space, with the big 3 (Amazon, Microsoft and Google) all vying for first position. They develop their products based on this mindset – they want to be everything their customers need in the cloud and, in doing so, own as much of the cloud market as possible.
Google has offered steep discounts to industries it thinks it can ‘own’, such as the genomics market and scientific research, while Microsoft offers bundled pricing and discounts on Office 365 for enterprise customers that use Azure. And Amazon’s recently leaked guidelines reveal that partners are forbidden from using terms like ‘multi cloud’ or other terms that imply they support more than one cloud provider. It’s a smart way for these companies to try and keep the competition at bay, but it isn’t bullet proof.
Customers are Growing Mindful of the Dangers of Vendor Lock-In
Google, Microsoft and Amazon have proprietary APIs, and their services, including CDNs, AI programs and analytics, are all incompatible with each other. They do so on purpose to make it difficult for customers to switch without completely rewriting their applications.
They also charge expensive egress fees to customers who want to take that data out. For example, if you decide to move your data stored in Amazon S3 Glacier to another cloud storage vendor, it could cost you more in egress charges for that one data transfer than it costs to store the data for a whole year.
Egress fees, annual price hikes combined with the cost of scaling up your cloud infrastructure (as storage demands increase), especially if not made transparent to the customer, quickly creep up and become a problem. With the average cloud budget rising to just shy of £2m according to a survey of IT decision makers last year, making sure those pounds are spent effectively and that budgets don’t spiral out of control is mission critical.
So for any business that values cost and strategic flexibility, avoiding vendor lock-in is critical. A multi-cloud solution will almost always deliver more value than an all in one provider can offer.
5G and The Data Explosion Will Force a Shift to Multi-Cloud
It’s no secret that data is growing at an astonishing pace. To give an idea of the growth potential, recent research from IDC indicates that the amount of data stored is doubling every two years and is anticipated to grow from 33 zettabytes in 2018 to 175 zettabytes by 2025. Plummeting network costs are also making it much cheaper to move large amounts of data over the public Internet.
5G will push the data explosion into overdrive as billions of new devices will have internet connectivity. As a result, we’ll see data storage move increasingly to the edges of the network. In a world filled with hundreds of zettabytes of data being stored and transferred on a daily basis, one cloud provider won’t suffice for most companies, and more will turn to specialist providers for their specific needs.
For example, Stackpath specialises in moving applications to the edge of the network, while at Wasabi, we cater to storage-intensive businesses like surveillance, backup and disaster recovery, as well as media and entertainment. And with most new cloud vendors adopting Amazon’s APIs as ‘de facto’ it’s much easier for customers to migrate their data.
No provider can be the best at everything and history would tell us that monopolies don’t last. Inevitably, a one-stop-shop cannot stay at the edge of innovation in all areas when faced with more specialised competitors. In future years, we can look forward to a much greater variety of vendors with different specialities. While the big 3 will continue to thrive, they won’t be able to lock in customers as they’ve done traditionally. Customers are becoming wise to the benefits of multi cloud both from a cost and flexibility perspective.