Which Side Are You on in the War of the Hyperscalers ?

By Kumar Singh, Research Director, Automation & Analytics, SAPinsider

The war of the hyperscalers

There is no doubt that hyperscalers like Azure, AWS and Google cloud seem to be taking over the technology ecosystem. These companies are not only dominating cloud services but dominating related domains as well. We are increasingly seeing more and more companies aligning to one of the hyperscaler camps. There is a strong push by hyperscalers to align some big names across industries into their camps, by forging long term strategic partnerships. The fact is, by end of this decade, most large organizations would have fallen into one of the “camps”. And this can be for good or for bad, for organizations that decide to align, based on whether their alignment to a camp was based on a strategic analysis or not.

Choosing a camp -The need to build strategic relationships with hyperscalers

The fact is, building that long term strategic relationship with hyperscalers is becoming an imperative for many organizations. Choosing a hyperscaler is increasingly becoming much more than choosing a cloud platform, with hyperscalers evolving rapidly into solution platforms and much more. All hyperscalers have developed products around their infrastructure that allow companies to build scalable, agile and flexible solutions fast. There is no way many of the large enterprises, with a web of legacy and point systems, can innovate at that scale using their on-premise or private cloud infrastructure. In my perspective, these hyperscalers come as big relief to many organizations that were just struggling to understand how to catch-up with the explosion of technology and computing power around them.

And the relationships that organizations will have to develop need to go beyond buying any form of “..as a service” offering. My strong opinion is that in order to leverage any form of  strategic advantage from collaborating with a hyperscaler, your need to build long term strategic commitments. While I totally understand that putting all the eggs in the same basket in this case is not good from business resilience perspective, the truth is, that is the only way to actually build end -to-end solutions and platforms that can be competitive differentiators.

And that is what makes choosing a camp very tricky !

The perils of making a wrong choice

Building a deep strategic relationship over next 10 years with a hyperscaler means that by end of the decade, you pretty much are stuck with that hyperscaler. I know that you hear that this is not the case and how transitioning from one hyperscaler to another is not that challenging. But the truth is, if you are actually leveraging a hyperscaler in the way you should be, by building a deep, strategic partnership like the one mentioned in the previous section, you do not have easy exit options. And hence, it is extremely critical for companies to understand which hyperscaler camp they want to be in, and they need to make that evaluation now, before it is too late. And that evaluation requires a strategic analysis of not only tech but mid and long term strategic requirements.

What does this mean for SAPinsiders ?

  • Your organization should have a cloud strategy by now. If it does not have one, this should become an urgent short-term initiative so that your organization can leverage the technology advances of this decade effectively
  • Once you have a cloud strategy, leverage that strategy to understand which hyperscaler is the best choice. The fact is, before you talk to sales rep of any hyperscaler, you should already have a “feel” of which hyoperscaler is a better fit for your organization
  • Once you choose a hyperscaler, build strategic partnership with them. Hyperscalers today offer solutions beyond the vanilla “…as a service” offerings. Collaborate closely with them to build unique solutions.