the three u.s. cloud computing giants encounter challenges
2024-10-03
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reference news network reported on october 2according to a report on the us "forbes" magazine website on september 25, for a long time, the cloud computing market has been dominated by three giants: amazon web services, google cloud and microsoft azure cloud service platform. these three large technology companies control the market, providing a vast and extensive infrastructure that provides the backbone of digital operations for companies across the business spectrum.
the rise of local services
amazon, google and microsoft have built massive conglomerates around their cloud offerings, and they are nearly ubiquitous in most companies' digital infrastructure. their platform offers a broad global presence, an ecosystem of complementary services, and the potential to scale operations almost instantly and at minimal cost.
for other institutions, however, this dominance is a matter of concern. the dominance of a few suppliers that are at least partly located outside their region creates a high risk of geopolitical risks or differences in the regulatory environment. issues such as data privacy, possible vendor lock-in, and more are driving strong demand for viable alternatives that offer a higher degree of control and localization.
against this backdrop, regional cloud service providers are increasingly making headway. these companies provide local services designed to meet the needs and regulatory requirements of the market, with a strong focus on data sovereignty. they offer businesses the opportunity to keep data within their borders, comply with very strict local regulations on data processing, and simplify the complex and high-risk issue of international data transfers.
what’s more, these providers can offer more targeted solutions, allowing businesses to avoid the one-size-fits-all approach of global giants and offer more locally based services.
perhaps the most interesting (and even surprising) example of this trend is schwarz digital – the it arm of the schwarz group.
schwarz digital was founded as a division to manage the group's diverse it structure and needs, but quickly grew into an independent division with a more significant market focus. by 2023, it will start operating for high-quality customers and fully transform into a regional cloud service provider. the company processes and stores all customer data only in germany and austria. this strict focus on data sovereignty is particularly attractive to large companies that are deeply concerned about privacy, data control, and compliance with the law. in 2023 alone, it achieved revenues of 1.9 billion euros and employs 7,500 professionals.
regional cloud providers bring some key advantages that mark their competitive positioning against global tech giants. in their pursuit of data sovereignty, they can maintain firm control over their data by keeping it localized to avoid the legal and regulatory headaches that come with storing data outside their home jurisdiction. in addition, regional providers are often more flexible and able to better meet their customers' needs by matching their services to local needs by providing tailor-made solutions.
competition is becoming increasingly fierce
however, regional clouds also have important drawbacks. scaling operations to compete with the tech giants' global infrastructure is a daunting challenge that requires significant investment and expertise. they also face a lack of broad partner networks that global vendors have built over the years to support their cloud offerings. these networks are critical to attracting new customers, supporting implementation and ensuring service levels are maintained.
another challenge is establishing credibility in a market with only a few large suppliers. regional suppliers must demonstrate that they can deliver the same quality as some of the established global giants, while retaining the other advantages of localization.
a revolution is underway as players enter the cloud market at a regional level. these players allow companies and businesses to have options, especially in regions where data sovereignty and privacy remain important concerns. regional cloud providers have carved out a segment of diversity in the market, although they still face serious challenges in competing with established giants.
as the cloud computing industry matures, the strategies and adaptations of challengers in these regions must bring this defining characteristic into the future dynamics of the cloud ecosystem—with business alternatives more aligned with the specific needs and values of these regions.
