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Cloud Service Providers: The Pushiest Players in Tech

While the cloud shift is intended to reduce computing costs, several companies face a surge in spending, with contract lock-ins and egress fees make it impossible to leave
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Throughout 2022, the major cloud service providers – AWS, Microsoft Azure and GCP – introduced several schemes, including free credits, technical support, certifications, etc, to ease the enterprise exodus to the cloud. The industry witnessed a strategic push from the providers through these schemes carefully crafting an unrelenting demand for their service . 

Last year, Microsoft introduced its Startups Founders Hub, which was open to all, to “empower startups’ ambitions and fuel innovation to drive economic and societal progress for Asia and beyond”. As part of the support to qualified startups, Microsoft also offered productivity tools like GitHub Enterprise, Visual Studio Enterprise and Microsoft 365.

Further, it announced the agritech startup scheme to cater to Indian startups at different stages of growth. All companies got access to Microsoft Azure, which helped in onboarding to the Azure Marketplace, where they could buy services from and offer their own to other Azure network partners. 

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Starting in 2016, Google Cloud too announced 1,000 Indian startups up to $20,000 each in free credits for using Google Cloud services. 

Even to this day, Microsoft, Google and AWS continue to offer free credits to new enterprises despite the growing need for cloud services and digital transformation happening across industries. This brings us to question if enterprises themselves are adopting cloud services because of the ease and requirements, or are they being aggressively pushed by cloud service providers, selling them to enterprises because they have built those products and capabilities? 


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Free, But at What Cost?

In a recent survey by MongoDB, 57 percent respondents reported that the use of the cloud helped them innovate, but 26 percent said that the cloud made innovation harder. Reason: cloud adds cognitive overhead. Currently, the developers work with multiple APIs, query languages, and data models, building applications on many different pieces of fragmented infrastructure.

Next comes the pricing. What happens after you run out of these lucrative credits? Microsoft recently changed its Indian price list to harmonise its prices for commercial on-prem software and services between India and the Asian region. Accordingly, the Indian rupee prices will increase by 4.5% and online services by 9%. As a result, Indian customers buying online services will continue to find Microsoft cloud offerings highly competitive. In March 2022, Google also announced significant (and some alarming) pricing changes for Google Cloud Storage that most users didn’t consider to be good news.

However, one can not deny the advantages of cloud as it simplifies the process of provisioning additional resources and experimentation with new software and tools. But, some believe that it also makes it easy to inadvertently create a massively complex architecture on top of the existing sprawl. 

Moving to the cloud does not necessarily mean it is a good idea. Today, services don’t provide a lasting competitive advantage, as every competitor has access to the exact same software and services. It’s up to internal teams to set organisations apart through innovations – with or without the cloud. 

Cloud Oligopoly

As on-premise server rooms are being usurped by the trinity of AWS, Azure and Google Cloud, it has inadvertently created a cloud computing “oligopoly”. Cloud may have championed the shift to remote working, but so much faith has never been placed on such a small number of tech companies.

The problem is that large clouds transfer data to their cloud architecture, charging a close to nothing ingress fee. But, as the cloud needs of startups fluctuate along with the state of affairs, many later find a payable egress fee to move their data out of the system. Those who can’t afford the fees must keep their data where it is, essentially locked into the contract.

Moreover, the security factor has been questioned by many. AWS’ Shared Responsibility Model stated, “Customers are responsible for managing their data (including encryption options), classifying their assets, and using IAM tools to apply for the appropriate permissions.” Microsoft takes a similar approach with Azure as described in its Shared Responsibilities for Cloud Computing paper that explains the security controls in place and where a customer’s responsibilities begin and end. Google has a similar mind for its cloud platform, detailing who’s responsible for what in its Customer Responsibility Matrix.

The Out of Hand Dependency  

One must remember Code Space AWS EC2 console’s hacking, which led to data deletion and the eventual shutdown of the company. Their dependence on remote cloud-based infrastructure meant taking on the risks of outsourcing everything.

While the cloud shift is intended to reduce computing costs, several companies face a surge in spending. In addition, contract lock-ins and egress fees make it impossible to leave. Some even argue that the cloud could cost more than it’s actually saving.

A spate of outages and IT failures in recent years highlight the risk of being so dependent on a small number of cloud technology providers. Gmail and Google Drive suffered an outage in 2020, while photographers lost data when Adobe Lightroom updates deleted users’ photos and Canon’s Camera Cloud Platform ‘lost’ original photo and video files. AWS infamously went offline in 2017, taking popular tools such as Grammarly, Medium, Slack, and Trello down with it. There was a realisation of how businesses of all sizes have become entirely reliant on a handful of third-party providers of on-demand computing power and data storage.

One reason for hopping onto the cloud is to offshore some of the tasks involved in managing applications and data, including security risks. But many businesses are making a mistake by expecting their cloud vendors to take on all or most of the responsibility for security, said a CyberArk report.

The Desi Landscape

There is an economic principle that states, ‘When demand grows, business grows and ultimately the job market grows’. Numerous data have revealed that India has the potential to become the second-largest cloud talent pool by 2025. The cloud experts’ demands are estimated to exceed 2 million.  

By 2026, 50% of organisations will use software and cloud-based infrastructures to create a 35% increase in sustainable efficiencies across workloads and data centres. And about 40% of Indian organisations will implement dedicated cloud services either on-premise or in a service provider facility by 2024, in response to the performance, security, and compliance requirements, according to the IDC report ‘FutureScape: Worldwide Cloud 2022 Predictions – India Implications’.

With the growing compliance burden, the Indian Computer Emergency Response Team (CERT-In) issued a directive in April 2022, which mandated cloud service providers and virtual private network (VPN) companies to retain their customer’s names and IP addresses for at least five years, even after they stop using the company’s services.

The directive has received a strong backlash from the Information Technology Industry Council (ITI). Some of the world’s largest tech companies, including Apple, Amazon, Meta, Google, and Microsoft, are represented by ITI. However, experts are on board with the tech giants here as the directive seems impractical and needs to be clarified. 

The ITI has requested to revise the directive to address the concerns concerning incident reporting obligations, including those related to the reporting timeline, data localization requirements, etc. But further development on the subject has yet to be reported. Hence, even with the rise in usage, big techs seem to be in a nascent phase. 

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Tasmia Ansari
Tasmia is a tech journalist at AIM, looking to bring a fresh perspective to emerging technologies and trends in data science, analytics, and artificial intelligence.

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