Niche cloud players spark multi-cloud migrations

  • Interconnection provider Console Connect sees enterprises making more multi-cloud moves

  • Rather than just adding more hyperscale clouds, companies are increasingly trying out niche cloud providers

  • Some gaining traction include Vultr, Wasabi and OVHcloud

The buzzards – excuse us, the Vultrs – are circling. Hyperscale clouds aren’t dead, but niche opportunists are increasingly nibbling at their market share, according to Console Connect executive Lionel Rayon.

Console Connect offers software-defined interconnection services, allowing enterprises to move data between clouds over dedicated IT infrastructure.

Asked about current customer trends, Rayon told Fierce Network “We see actually an increased demand for high bandwidth for a very short term of time.” Why? Because enterprises are increasingly looking to shift workloads to niche cloud players like Vultr, Wasabi and OVHcloud to take advantage of competitive pricing, he said.

But they aren’t entirely exiting hyperscale environments.

While Console Connect sees enterprise customers adding cloud solutions to their existing multi-cloud lineup, Rayon noted they are taking a cautious approach to experimenting with smaller players by migrating just some of their workloads. “This is a huge trend now," Rayon said.

"Most companies [already] have a multi-cloud strategy and there are some new cloud players that are really specialized, for example Vultr, which is a very competitive U.S. cloud offering more aggressive pricing and is sometimes more flexible than the big hyperscalers. And they are getting more attractive for a number of enterprises,” he explained.

What does any of this have to do with Console Connect? Well, the company offers private connections up to 100 Gbps which allow enterprises to move their data from one cloud to another.

Why does that matter? Because though egress fees have been mostly eliminated for companies fully exiting hyperscale environments, they still exist for partial transfers and other daily activity. But egress fees just so happen to be lower for data transferred using a private connection rather than the public internet.

For the most part, Rayon said enterprises are looking for private connections with speeds of 1 Gbps, 5 Gbps or 10 Gbps for a duration of one to two months to allow them to make the aforementioned moves.

And these moves are bolstering business for niche cloud players, which he said have increasingly been expanding outside the bounds of their initial target markets.

U.S.-based Vultr, for instance, now has 32 data centers around the globe and recently launched sovereign and private cloud services. And France-based OVHcloud now has more than 35 live or planned data centers globally, though these are largely concentrated in Europe and North America.

Synergy Research Group noted hyperscalers accounted for 73% of the public cloud market in Q4 2023, with Microsoft and Google Cloud both increasing their market share. But it’s worth noting that while smaller players may not see huge market share gains, that doesn’t mean they won’t see revenue gains as the overall market continues to grow.

According to Gartner’s latest forecast data from December 2023, worldwide spending on public cloud services is expected to hit $666.8 billion in 2024 and $819.7 in 2025. Of those totals, cloud infrastructure-as-a-service is expected to account for $178.8 billion in 2024 and $231.9 billion in 2025.