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The Rise of Multi-Cloud: How It Benefits Buyers and Sellers

Multi-cloud adoption, whether it comes to cloud hosting or CDN (Content Distribution Networks), has been steadily increasing across all company sizes over the last few years, Intricately data shows. When strategizing for revenue growth in 2022, cloud providers have an opportunity to align their strategic sales approaches with this multi-cloud adoption trend.

On the buy-side, the multi-cloud adoption trend is being driven by numerous, long-term factors such as the increasing demand by global users for more data storage and high-speed data transmission, which we’ll discuss at length. On the sell-side, the opportunities for generating increased revenues are clear as companies of different sizes continue to mature and grow their cloud infrastructure. 

We’ll also explain why sellers shouldn't shy away from prospects already working with multiple cloud hosting providers or multiple CDNs. Competition for cloud spend, as we’ll see, does not prevent strategic partnerships with other cloud providers to help address growing customer needs. There’s enough pie to go around for everyone – and no matter how you slice it, that pie just keeps getting bigger.

The Rise of Multi-Cloud Adoption: Cloud Hosting

Intricately’s 2022 Multi-Cloud Infrastructure Adoption Report shows that multi-cloud adoption has been growing recently across all company sizes. For example, the multi-cloud adoption of the three leading cloud providers (AWS, GCP, and Azure) among large enterprises has increased by 20% from 2018 to 2021. Intricately data also reveals that 77% of large enterprises currently invested in cloud hosting solutions are working with multiple providers. 

For all other companies, a multi-cloud hosting architecture is not quite as popular, although the drivers of the multi-cloud trend (which we’ll describe later) are accelerating, creating a massive “multi-cloud opportunity” for cloud sellers in these non-enterprise companies:

  • Startups: 22% of them have adopted multi-cloud hosting, meaning 78% have not.
  • SMBs: 10% of them have adopted multi-cloud hosting, meaning 90% have not.
  • Mid-markets: 20% of them have adopted multi-cloud hosting, meaning 80% have not.

The Rise of Multi-Cloud Adoption: Multi-CDN Adoption

A Content Distribution Network (or CDN) is, according to Akamai, “a network of servers that distributes content from an ‘origin’ server throughout the world by caching content close to where each end user is accessing the internet via a web-enabled device.” CDNs, put simply, facilitate the easy and speedy transmission of data from where it’s stored to where it’s needed, i.e. to users’ devices.

As companies advance in their size and maturity, their CDN adoption grows. The multi-CDN trend is statistically similar to the multi-cloud hosting trend we discussed earlier. Enterprise-level companies are clearly leading the way, with 58% of them adopting multiple CDNs. The multi-CDN trend is being driven by several factors, including increased demand from global users for more data and faster transmission times (streaming is just the tip of the iceberg here), but also by significantly more CDN vendor competition and the growing number of specialized CDN offerings on the market.

Similar to the story with multi-cloud hosting, the multi-CDNs trend offers massive opportunities for sellers in terms of untapped revenue potential, whether you choose to compete against or partner with other cloud hosting and/or CDN providers:

  • Startups: 8% of them have adopted multi-CDNs, meaning 92% have not.
  • SMBs: 29% of them have adopted multi-CDNs, meaning 71% have not.
  • Mid-markets: 27% of them have adopted multi-CDNs, meaning 73% have not.

4 Key Drivers of Accelerating Multi-Cloud Adoption

While Intricately data clearly shows that a significant multi-cloud trend is underway, offering tremendous value to customers and massive, untapped sales opportunities for cloud providers, it’s important to understand what’s driving the trend in order to better evaluate its scope and durability. We’ve identified the following factors as key drivers of multi-cloud adoption:

1. Global markets and users are demanding more cloud storage and more (and faster) data transmission.

The global adoption of computing services continues to accelerate, as does storage and data-intensive technologies like streaming, AI, and all forms of digital engagement, from remote working to online shopping and beyond. The COVID-19 global pandemic has only accelerated ongoing, pre-pandemic trends around digital adoption for consumers and digital transformation for companies. The need for more data storage and faster data transmission is not going away during or after the pandemic, but instead will continue growing globally.

2. Flexible, more competitive pricing for multi-cloud adoption.

It may be the oldest rule in selling, going back millennia: the more you buy, and the more vendors you bring into the competitive mix, the lower your per unit cost. Economies of scale apply to the cloud, too. Among the reasons buyers turn to multi-cloud adoption, besides increasing user demands for more data storage and faster data transmission, is that they can gain more flexibility and better pricing from cloud vendors when they go multi-cloud. Splitting your bets is often a more strategically-sound approach than putting all your chips on a single provider.

As competition and innovation continue to accelerate within the cloud space, multi-cloud adoption will make more sense from a flexibility and pricing standpoint for more buyers of all sizes. Cloud providers, for their part, have chosen to partner with, and also compete against, other cloud providers depending on their go-to-market strategies and the needs of their customer base. Marjorie Abdelkrime, Head of Multi-Cloud at VMware, believes that competition and strategic partnership can co-exist in cloud sales:

“When people talk about the different cloud vendors, they usually say there's one pie and Google, Amazon, and Microsoft are taking pieces of it until it’s all gone. I like to say there's actually two pies: one pie where the customer has already decided certain applications and certain workloads are going to be cloud native. They’ll be on Amazon, Microsoft, or Google. But then there's this whole other pie [of customer problems] we can solve for, and we can actually have that whole pie by helping our customers address and solve their problems.”

VMware, for example, is competing against (while partnering with) the big cloud hosting providers. Or as Abdelkrime explains it:

“VMware partners with the big cloud providers and we’re vendor agnostic: we like to call ourselves Switzerland. So if Google is a customer’s strategy, then we'll partner with that customer to drive Google. But we're also providing our customers with that flexibility to move to a different cloud host provider if they want to.”

The takeaway? Customer needs drive adoption – not a cloud vendor’s needs.

3. Multi-cloud offers improved disaster recovery.

The risks from global climate change, a global pandemic, and cybercriminals have become very real over the last few years, as anyone reading the headlines can attest. Business continuity can quickly get disrupted by so many factors, from hurricanes to supply chain bottlenecks caused by weather or labor shortages and many other reasons. 

Systems and IT infrastructure can go down fast, as can cloud hosting services, thus utterly disrupting business continuity. Having multiple cloud hosting providers and multiple CDNs can thus be a necessary “back-up” or contingency plan/insurance policy should things go wrong (and alas, they probably will at some point).

4. Product innovation in the cloud, particularly containerization, has better enabled multiple cloud applications to coexist.

Recent developments in cloud computing have launched an era of on-demand infrastructure, self-provisioning of resources, and flexible application architectures that make it easier and faster for companies to develop, launch, and support applications. “Containerization,” according to Red Hat, “is the packaging together of software code with all its necessary components like libraries, frameworks, and other dependencies so that they are isolated in their own "container."

A container can then be moved and run consistently on any infrastructure, so it’s agnostic/flexible in terms of the cloud host or network. The container is basically a fully functional and portable computing environment which doesn’t need to be adjusted if a company changes its infrastructure/cloud environment. 

Leveraging Multi-Cloud Usage Data to Generate Sales

There are significant opportunities for cloud providers to grow market share by complementing their competitors in a multi-cloud approach. Intricately is monitoring not only how many cloud solutions a buyer has deployed, but how much is being spent on those solutions. We also calculate multi-cloud spend potential, so sellers can scope out the potential size of each opportunity for each target prospect.

To learn more about the growing sales opportunities created by the rise of multi-cloud, check out Intricately's 2022 Multi-Cloud Infrastructure Adoption Report. Our full analysis includes top global prospects with high spend potential already leveraging a multi-cloud approach.

View the report

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