A recent report from Synergy Research revealed that the big four ‘mega’ providers – namely Amazon, Google, Microsoft and IBM – control the cloud market.

The figures show these four vendors account for well over half of the worldwide cloud infrastructure service market. Mega-providers are attractive to many organisations because they represent a ‘safe pair of hands’, and are the default choice because of the perception of the greater ‘ease’ of migrating to a large vendor.

In addition, the need for 100% availability means organisations often feel more confident moving workloads to a Google or Microsoft platform, for example, rather than a lesser known provider.

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However, even the mega providers can’t guarantee an uninterrupted service, with Amazon’s S3 web-based storage service in Northern Virginia (US-EAST-1) suffering a significant outage as recently as February this year.

Ultimately, every company has different motivations behind a move to cloud. As such, there is no one size fits all strategy, so is bigger always better when it comes to cloud?

The opportunity for smaller cloud vendors

Behind the ‘big four’ sit a second tier of cloud providers that are working to make up ground on the mega providers; these include companies such as Rackspace, Alibaba and Oracle.

There are also a large number of niche cloud providers that target growth by focusing on very specific regions or industries, such as manufacturing or banking, to differentiate themselves from the competition.

At the same time, smaller vendors have an opportunity to challenge mega providers by providing better, more personal levels of support to organisations. This is crucial, as today many businesses lack sufficient in-house skills to optimise and manage their cloud environment.

As such, they may benefit more from a close relationship with a smaller provider, than with a ‘faceless’ cloud monolith. Smaller cloud vendors also have the advantage of being able to offer bespoke services.

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This is especially valuable for those companies that have very specific business objectives or may need cloud only for distinct workloads, and are worried they’ll have to make compromises on flexibility and control.

Understanding the true cost of cloud

It’s crucial that organisations understand the real cost of cloud before making a final decision. This can be a major challenge for CIOs, especially as according to 451 Research over one third of cloud providers do not publish their prices online.

While cloud services are often marketed as simple and consumable, the reality is that understanding the myriad costs and commercial models of cloud can be tortuous.

As a result, it’s unsurprising CIOs opt for the ease of a mega provider, rather than wasting valuable time looking for hard to find prices, even though a smaller provider might represent better value for money.

To avoid this pitfall – before selecting a cloud provider, CIOs must consider what they are looking to gain from cloud, and how different cloud services and vendors will benefit their organisation.

Once the organisational goals have been identified, the next step is to evaluate whether the applications they seek to run in the cloud can be re-architected, or if the procurement of a new SaaS product is required.

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It is only after this assessment is made, that businesses should start looking at individual cloud providers to be able to make an informed decision on what is best for the business, rather than judging purely on size.

Every cloud journey is different

Every organisation’s needs are unique – the key factor for CIOs, is whether the contract they sign actually suits the needs of the business, and if the cost of the cloud service fits the budget.

Whichever vendor they choose, whether big or small, organisations must ensure they retain control and visibility into their cloud environment. As the number of cloud providers and payment models on offer grows, CIOs need to optimise and simplify management of the cloud environment.

Without this, costs with any vendor can quickly spiral out of control and nullify any savings organisations sought to gain. In the cloud, it’s not the size of the cloud provider that matters, but what you do with it that counts.

Sourced by Maarten van Montfoort, vice president Northwest Europe at COMPAREX