Since the inception of the cloud, large monolithic infrastructures have been the norm. Azure, AWS and Google Cloud all offer almost infinite scalability and relatively low cost. However, is the dominance of the big three cloud service providers waning?

Businesses have been increasingly creating smaller hybrid cloud structures to meet their needs. By mixing on-prem and larger hosted platforms, they have been afforded greater choice and the ability to develop specific cloud infrastructures.  

However, are we moving into an era where bespoke cloud services become popular, as businesses look to create ‘boutique’ clouds – offering more personalisation and a specific set of features often linked to one service application?

Speaking to IT Pro, Nick McQuire, senior vice president of enterprise research at CCS Insights, says: “The definition of what a boutique cloud is remains open. You could argue, for instance, that a private managed cloud is also a boutique cloud, so I think we need to define what we mean.”

“I think the future of cloud services is a real mix. The hyperscalers will always be there, as will the hybrid cloud infrastructures,” McQuire continues. “Inside of these, we may see more specialised cloud services, which could be described as ‘boutique’ for specialist sectors such as financial services, or to meet specific regulatory requirements.”

The industry is already seeing a move to multi-cloud deployments: Microsoft’s Azure Arc – a rebranding of its Data Box Edge hardware – for example, focuses on the burgeoning IoT and edge computing space and is in public preview. The idea is to bring VMs and containers to any infrastructure no matter irrespective of needs of size. Enterprises with specific requirements for their cloud deployments could create a boutique cloud within the Microsoft environment.

For many industry watchers, the next battle will take place across the multi-cloud, as enterprises continue to focus on building the bespoke services they need. Already the major players are jockeying for position: Microsoft has Azure Arc, Google has debuted Anthos, IBM will run its services on multi-cloud management systems and Cisco has its CloudCenter Suite.

The adoption of cloud services will continue. According to Gartner, by 2022, nearly a third (28%) of spending on essential IT services will shift to the cloud.

Michael Warrilow, research vice president at Gartner, explains: “Cloud shift highlights the appeal of greater flexibility and agility, which is perceived as a benefit of on-demand capacity and pay-as-you-go pricing in cloud.”

Is smaller better? It all depends on the specific business need. What is certain is the cloud environment is rapidly changing. We are moving out of its first phase of development to more refined services and flexible infrastructures.

Compact and bijou

Research from Flexera illustrates how hybrid cloud adoption has expanded, with 84% of enterprises have a multi-cloud strategy. Enterprises with a hybrid approach (combining public and private clouds) grew to 58% last year according to their survey.

Flexera also revealed: “Among enterprises, the central IT team is typically tasked with assembling a hybrid portfolio of clouds. This year, while 31% of enterprises see public cloud as their top priority, a combined 45% of enterprises see a hybrid cloud or a balanced approach between public and private as the biggest focus. Only 9% of enterprises are focusing on building a private cloud, and 6% see their top priority as using a hosted private cloud.”

The multi-cloud and hybrid cloud have continued to expand to become the dominant form of cloud service infrastructure. But as we move closer to real-world deployments of 5G and edge computing, the multi-cloud may change again to become more boutique as services specialise.

CCS Insights’ McQuire explains: “If your business is a complex IT environment, then existing suppliers like IBM and Red Hat, for instance, will be able to offer you the services your business requires. The mix of on-prem and public cloud isn’t going to go away anytime soon. However, what I think we are beginning to see the first green shoots of is the large players pushing into specific industries. IBM last year, for instance, launched a cloud service aimed at the financial sector.”

Commenting on the research hic company conducted with Freeform Dynamics, Hiren Parekh, UK country leader for OVH, adds: “Our results show strong interest in working with specialist cloud providers, with 21% of organisations committed to using providers aligned to specific applications or infrastructure; 18% are committed to using specialist providers focused on particular use cases and 17% are committed to local providers who cover a specific geography. This echoes what we are hearing from our customers, suggesting demand for cloud providers of all sizes and underlining the popularity of the multi-cloud approach.”

A specific need will drive the business case for smaller cloud services. Large cloud deployments can become unwieldy with businesses often feeling they have little control. Hybrid cloud infrastructures have addressed these anxieties to a degree, but we could see more refinement in how companies buy and organise their cloud services over the short term.

A small cloud future

Smaller cloud service providers such as Vultr, Packet, UpCloud and Linode offer compact and specific services, which could define both what the boutique cloud means today and how some cloud services could be bought over the next few years, particularly by smaller businesses.

“I see a cultural shift in risk appetite which we see across the whole spectrum of technology,” says Justin Day, CEO of Cloud Gateway. “Businesses are seeking out smaller cloud service suppliers because they offer better flexibility and more agile working while also being more focused or simply better at delivering more niche services. Because at the end of the day, it’s about allowing businesses of all sizes to get the very best out of their cloud systems and leverage the very best out of those service suppliers.”

Adam Bradley, UK MD of Ekco, believes service levels are pushing companies towards smaller cloud service providers. “I think people are just sick of bad service,” he says. “They are sick of waiting for someone who knows what they are talking about to call them back, and they are tired of having to do all the hard work themselves.”

Cloud services have become somewhat horses for courses. CTOs tasked with adopting an agile cloud-based IT infrastructure have often found themselves managing what could be described as cloud sprawl – running several cloud deployments from several vendors. Businesses are rationalising their use of the cloud.

As cloud services have matured, it has opened the door for smaller service providers who can focus on specific sectors or industries. Building cloud services for these highly defined spaces is a crucial trend through 2020. In the medium term, whether these boutique vendors can remain viable faced with shifts by the large cloud suppliers towards multi-cloud and specialist cloud services, remains to be seen.