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The Role of Boutique Cloud Service Providers in the Modern Cloud Landscape

This week I was thrilled to hear about my former employer, Zettagrid, expanding their operations and opening new hosting zones in the US. This news is not only a testament to the company’s growth and success but also vindicates the position of boutique Cloud Service Providers (CSPs) in the era of hyper-scale public cloud providers.

When I decided to leave Zettagrid, one of the reasons was that I wasn’t sure where the IaaS industry would be placed in five years. However, over the past three years, the industry has pulled back significantly from the previous inferred position of total and complete hyper-scale dominance in the cloud and hosting market. The conversation has shifted towards multi and hybrid cloud platforms, with VMware leading the charge.

The inflection point came at AWS re:Invent last year when AWS Outposts was announced, signaling a shift in mindset towards consuming on-premises resources in a cloud way. This move by the undisputed leader in the public cloud space is a testament to the demand for alternative solutions beyond traditional IaaS.

As someone who has always been a big supporter of boutique CSPs and Managed Service Providers, it’s exciting to see these providers thrive by offering their partners and tenants differential services, going beyond traditional IaaS. These might include enhancing their IaaS platform with new features like APIs or the ability for new wave Infrastructure as Code tools to provision and manage workloads.

Take, for instance, vCloud Director, which has continued to offer something new in each release, allowing service providers to enhance their platforms and offer more services to their customers. The Plugable Extension Architecture now allows service providers to offer new services like backup, Kubernetes, and Object Storage. Many service providers have also transitioned to offering Backup and Disaster Recovery solutions, which in many cases has been the biggest growth area for them over the past few years.

Even with the extreme cheapness of hyper-scale public cloud object storage platforms, there is still a significant role for Service Providers in conjunction with other cloud platforms for a long time to come. The successful service providers are not sitting on their hands and expecting what once worked to continue working; instead, they are looking at ways to offer more services and be that trusted provider of IT.

I was once told in the early days of my career that if a client has 2.3 products with you, then they are sticky, and the likelihood is that you will have them as a customer for several years. While I don’t know the accuracy of this belief, I have always carried it with me. This idea flies in the face of modern thinking around service mobility, reinforced by improvements in underlying network technologies allowing workload portability and ease of provisioning, managing, and migrating modern applications.

However, all service providers want their tenants to be sticky and not move. Whether it’s through continuing to evolve existing services, adding more ways to consume their platform, becoming a broker for public cloud services, or being a trusted final destination for backup and Disaster Recovery, the talk about hyper-scalers dominating the market is not an accurate reflection of the industry currently.

In conclusion, the expansion of Zettagrid into new hosting zones and their US operations is a testament to the continued growth and success of boutique CSPs in the modern cloud landscape. The shift towards multi and hybrid cloud platforms and the demand for alternative solutions beyond traditional IaaS are proof that there is still a significant role for Service Providers in conjunction with other cloud platforms for the long haul. It’s an exciting time to be part of this industry, and I look forward to seeing how these providers continue to evolve and innovate in the coming years.