How many Cloud Service Providers (CSP) companies typically use and how they distribute their 💎 workloads/budgets? Let’s take a closer look.
These insights help you to better understand buyers, if you’re selling via cloud marketplaces. Or they may help you to benchmark your own cloud strategy.
📊 80% of Organizations Use Multiple CSPs
Research from McKinsey & Company reveals that over 80% of companies in North America and Europe use two or more CSPs, like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. This multi-CSP approach reflects diverse needs in applications, infrastructure, and skill sets within large organizations.
✔️ Single CSP Choice
Companies opting for a single CSP often aim for simplified maintenance, faster talent upskilling, specific toolsets and platform capabilities, and cost efficiency (via scale discounts and operational savings).
✔️✔️ Multi-CSP Strategy
The adoption of a second CSP usually comes into play to capitalize on its unique strengths or enhance competitive leverage. However, this demands additional investment in talent upskilling and maintaining architectural and operational consistency.
Let’s reflect on how companies adopt different cloud providers from the graph - you can guess the names of CSPs easily.
🏬 Industry-Specific CSP Preferences
Certain industries show distinct preferences for CSPs. E.g. the Banking/Insurance industry leans heavily towards CSP 1, particularly companies 2 and 5 with 100% of their workloads there. Healthcare companies 10 and 11 have a high allocation in CSP1 it too.
This preference could be due to specific service offerings, compliance, security features, etc.
🎯 Diversification and Dominance
Many companies distribute workloads across CSPs, leveraging varied strengths and to mitigate risks. Yet, CSP 1 emerges as a dominant player, particularly in sectors highlighted above.
📅 Trends by Cloud Program Start Year
Companies starting their cloud programs more recently show tendencies towards a single CSP, while those with older programs show a more diversified CSP usage. This is a natural evolution in the cloud journey.
⛅️ Emerging Opportunities
Noticeably, CSP 3 is gaining ground, especially among companies that started in cloud post-2016. This shift could signal changing market dynamics or improvements in CSP 3’s offerings.
💡 Marketplace Buying Trends
Considering these trends, 80% of large companies will likely have cloud commits across multiple providers and buy via their marketplaces. Microsoft UK recently shared that 85% of customers with MACC are buying via its marketplace.
Key Takeaways for Alliances
Tailoring your strategy to meet the specific needs of various industries is key.
Building strong relationships with dominant CSPs is crucial, but keep an eye on emerging CSPs for new opportunities.
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