Will 2022 Be the Year of Alternative Cloud?

The Big Three public cloud providers have been dominating the market for quite some time. But this could be the year that alternative cloud makes inroads into their dominance.

Christopher Tozzi, Technology analyst

February 3, 2022

5 Min Read
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Alternative cloud providers — meaning public cloud providers other than the “Big Three” — have been around for a number of years. To date, they commanded relatively small market shares compared with Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

Yet, there’s decent reason to predict, as some folks have, that we’re on the cusp of a major surge in alternative cloud adoption. AWS, Azure, and GCP may not disappear anytime soon, but it’s possible that more and more workloads will be split between one of these large public clouds and alternative cloud providers, like IBM, Cisco, DigitalOcean, Linode, OVHcloud, and Vultr.

It’s also possible that alternative clouds will always remain just that — alternatives that are used by some businesses, but that never really cut into the market share of the Big Three public cloud providers in a critical way.

Here’s why 2022 could be the year that alternative cloud takes off — or, alternatively, why it won’t.

The Momentum Behind Alternative Cloud

Again, alternative cloud platforms are nothing new. Linode, for example, dates back to 2003, which makes it just as old as AWS, and DigitalOcean has been around since 2011.

For most of their history, alternative clouds were distant competitors with the Big Three clouds. Although many alternative cloud providers have enjoyed business success, few people ever saw them as platforms that would become head-to-head competitors with the likes of AWS and Azure.

But there are some reasons to believe that could change in 2022.

Alternative clouds are going public

DigitalOcean made splashes last year when it launched an IPO. Backblaze, an alternative cloud storage provider, also announced an IPO in 2021.

To be sure, going public doesn’t automatically translate to business success or widespread adoption. Still, moves like these are a sign that some investors, at least, believe alternative cloud providers have a bright future. IPOs will also likely draw more attention to alternative clouds, putting them on the radar of CTOs and CIOs who may currently not even know they exist.

Stagnating public cloud costs

For a long time, the Big Three public cloud providers slashed their prices on a regular basis. They still slash prices — AWS recently reduced its egress and S3 storage costs, for instance — but not as frequently as in the days when the Big Three clouds were aggressively trying to underprice each other.

As a result, alternative clouds have a bigger opportunity to compete on price, which they often do well. For example, alternative clouds that specialize in storage, like Wasabi and Backblaze, tend to beat the Big Three clouds hands-down when it comes to cost per gigabyte.

Expanding geographic footprints

Early on, few alternative cloud providers were able to offer a wide selection of data center locations.

But today, alternative clouds such as Linode and DigitalOcean can boast geographic footprints that are solidly global in nature. They still don’t offer as many data centers or regions as providers like AWS, but they do have presences in most of the locations that matter.

In this sense, alternative clouds are now better positioned to compete with the Big Three when it comes to geographic scale.

Public trust and brand image

While being part of a major brand like Amazon or Google may help the Big Three clouds in some respects, it’s also a hindrance, especially in an era of growing concerns surrounding Big Tech.

Most of the alternative cloud providers don’t have to worry about these sorts of negative associations. No one associates names like Vultr or Linode with congressional hearings about data privacy or antitrust lawsuits.

To be clear, I’m not saying to avoid clouds like AWS or GCP simply because of charges made against their parent companies in areas that don’t actually have much to do with cloud computing. But from the perspective of the public at large, the brand connotations of the Big Three clouds may be off-putting to some, which is an advantage for alternative cloud providers.

Headwinds for Alternative Cloud

Despite the advantages that alternative clouds seem to enjoy at the moment, they still have some hurdles to overcome if they are to go mainstream.

One is that most alternative cloud providers continue to offer only a basic set of core cloud services. You can run VMs, set up object storage, and (sometimes) run managed Kubernetes. But you can’t do a whole lot more than that. The Big Three clouds offer a much larger set of service types.

Relatedly, the Big Three clouds have invested more heavily in cloud management tooling than alternative clouds. Vendors like AWS and Azure have entire suites of cloud observability and security tools. They also provide automations that can help with large-scale user and account management. Few alternative clouds offer these types of solutions.

Brand awareness may also prove to be an enduring hurdle for alternative clouds. Many folks — even those who work in IT — are only vaguely aware, at best, that alternatives to AWS, Azure and GCP even exist. And if they are familiar with alternative clouds, they’re likely to face an uphill battle persuading colleagues and managers to invest in cloud platforms they have barely heard of.


So, will 2022 prove to be the year that alternative cloud really takes off? Will a critical class of businesses start using alternative clouds alongside AWS, Azure, or GCP?

It’s no sure bet, but there’s a decent chance they will. If nothing else, I expect we’ll at least see a significant uptick in awareness of alternative cloud platforms this year, thanks especially to the rising profile of providers like DigitalOcean and a growing sense that the Big Three clouds are not the right solution for every workload.

About the Author(s)

Christopher Tozzi

Technology analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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