Microsoft has been in the headlines recently as part of a significant lawsuit in the UK that accuses it of anti-competitive practices, making it more expensive to use Microsoft services on cloud platforms other than Azure. Microsoft has argued that licensing its services to other providers like AWS and Google in fact helps their competitors, and that “the cloud market has never been so dynamic and competitive.”

There's truth to this claim - cloud service revenues are due to exceed $400bn this year, according to Statista, and there are a wide variety of players in the market. But in the context of this, the UK government’s finding that only one percent of businesses switch their cloud provider every year is particularly worrying.

It’s fairly common knowledge in the business community that changing your organization’s cloud provider not only takes a considerable amount of effort and time, but can also cost an eye-watering amount of money.

In fact, McKinsey research from 2021 found that 75 percent of cloud migration projects exceed their budgets. It is estimated that in the previous three years, businesses have spent $100 billion in unplanned expenditure from cloud migrations alone. A Statista survey similarly found that 82 percent of cloud customers cited managing cloud spending as their main cause of failed migration.

Often, this comes as a result of practices, such as egress fees, which charge customers for removing their data, making it much more difficult to use multi-cloud solutions or programs from different providers. It’s easy to see that these strategies would nudge their clients into “walled gardens” of integrated services from one company, and have a chilling effect on business decision makers who might consider a competitor.

While it’s notable that, because of the EU data act, many cloud providers operating in Europe are moving away from egress fees, switching still comes with many onerous strings attached, and is usually charged “at-cost,” which can still be considerable enough to dissuade users from switching.

Given these barriers, many companies are deciding to insulate themselves long-term from any given single cloud provider. There are multiple solutions, but of course, all come with distinct benefits and costs that are worth considering.

On-premises

Some companies have responded to predatory practices in the cloud sector by moving more of their capabilities on-premises (sometimes known as ‘on-prem’), either to data centers within their own facilities or to data centers they have a direct relationship with. This affords them greater flexibility on their requirements and more precise tailoring over security – which is why most governments storing sensitive data do it this way.

This allows companies to avoid the sometimes unnecessary fees and hurdles that cloud companies can sometimes impose, and can at times improve security and reliability – after all, given that cloud companies are vast interconnected networks, the chance of a failure in one system cascading to others is increased, and they represent a better target for cybercriminals.

On the other hand, setting up data infrastructure on-prem puts a greater responsibility on users to set it up properly. According to one ongoing study by Thales, between 31-55 percent of cloud breaches occur due to human error, and simple misconfigurations can become major security breaches, meaning it is very important to set it up with care.

Multi-cloud and strategic data architecture

Some companies have opted for a ‘multi-cloud’ strategy, splitting their data and operations between multiple cloud systems in order to avoid limitations like usage limits and scaling egress fees for large downloads. This is a form of Strategic Data Architecture, which can be used for the purpose of security and risk management. Sometimes, using the cloud in this way can be a ‘best of both worlds’, getting the benefits of multiple cloud systems without overly committing to one in a way that would introduce risk.

On the other hand, this can introduce significant amounts of complexity on an organizational scale, often requiring training and effort spent getting technical buy-in from employees. One might also add that while it might mitigate the risk of fees and additional costs, it doesn’t mitigate the risk of cloud outages. If one system goes down, you would be without any access to what could be a significant portion of your data.

Bi-directional synchronization

With current technology, it's now possible for companies to bi-directionally synchronize their data, either between a cloud and on-prem solution or cloud to cloud. This is functionally different from a multi-cloud strategy, because it doesn’t involve splitting or segregating your data in any way, but creates an ongoing, automatically updating backup.

This not only allows for disaster recovery, but true co-existence between systems, allowing users to use the same data on a different application. Allowing businesses to use the strengths of other cloud platforms and avoiding vendor lock-in.

In our experience facilitating these systems, having ongoing bi-directional synchronization has meant that companies have had additional bargaining power when negotiating with cloud companies, knowing that ending their relationship with one wouldn’t result in a tiresome, organizationally difficult migration. This provides a useful defense against companies that try to leverage a company’s dependent position on them.

It also provides a useful continuity solution in case of an outage, allowing companies to instantly switch from one system to another.

It’s important to note that this route, much like all others, isn’t perfect, and many involve paying additional fees to transfer data. But especially when these costs can be kept low, a bi-directional sync like this provides some defense against these practices.

How companies move forward

In today’s economy, it appears that companies are becoming more dependent on the cloud – not less. It’s only to be expected that many of these companies will leverage their market position in order to get more favorable terms and position their clients towards their products.

However, it doesn’t have to be this way, and solutions exist to maintain their operational independence. All of them have costs and benefits, but in an economy that exists more in the cloud than ever, it's worth considering.