For more than a decade, Cloud computing has been on an exponential growth path, attracting customers of all shapes and sizes. The potential of simplicity and scalability, along with the cost-benefit analysis of CAPEX v/s OPEX turned cloud computing into the juggernaut of software infrastructure that it is today. It is estimated that by 2025, 94% of enterprise organizations will use cloud computing in their operations. More than 50% of the IT spending has been shifted to the cloud.
The major share of the $1.3 trillion market is dominated by three cloud vendors, Amazon Webservices ( AWS ), Microsoft Azure, and Google Cloud ( GCP ), with a combined market share of 64%. These vendors are referred to as Cloud Hyperscalers, owing to their global presence, the large network of data centers, and a long list of cloud services that are counted in triple digits. These enabled the customers to host enterprise applications with millions of global users. These hyperscalers are also referred to as the “Big 3” of cloud computing. There are several other players in the market, and trailing just below the hyperscalers are the Oracle Cloud, IBM Cloud, and Alibaba Cloud. Despite being backed by the big names in the industry, their combined market is less than 10%.

Benefits of hyperscalars

Hyperscaler clouds offer many benefits including:

Scalability – Equipped to handle workloads that have to scale massively. Scaling up to millions and scaling down to near zero for any given workload is what makes hyperscalers appealing to enterprises and startups alike. Hyperscalers can cater to businesses that scale up seasonally or have a volatile demand.
Global availability – Data centers/cloud regions across the globe. Helps with better redundancy, disaster recovery, and business continuity plans. With more countries enforcing data sovereignty laws, this becomes critical for certain businesses.
Breadth & Depth of Services: With everything from basic computing and storage to advanced AI/ML services, IoT, and enterprise databases, hyperscalers cater to virtually any workload.
Vibrant Ecosystem: Hyperscalers have large user bases that translate into robust community support, extensive documentation, and a massive partner network. This means that there will be a large talent pool of engineers as well as vendors who can provide expert cloud solutions.
Developer-Focused Tools: Hperscalers provide an improved developer experience with cloud consoles, CLIs, APIs, and SDKs. An ample free tier for most of the services encourages developers to experiment and build solutions on top of these cloud services.
Security – Hyperscalers offer better security, often due to their heavy investment in infrastructure and network as well as security research that helps them withstand abuses and security attacks. They also offer a plethora of security products that fit enterprises as well as startups on a pay-as-you-go model.

Challenges with Hyperscalars

The value that hyperscalers bring to the cloud ecosystem is unquestionable, but there are times when their users run into various technical and business challenges. Sometimes the advantages that make them hyperscalers can turn out to be a disadvantage.

Overwhelming Service Catalog – The breadth of services, while beneficial, can also be overwhelming. Navigating hundreds of specialized offerings can lead to confusion and a steep learning curve for smaller teams.
The complexity of management – Managing hyperscaler infrastructure can be challenging if you don’t have someone dedicated and expert on the specific cloud stack. Every common service has multiple moving parts and configuring them right is a challenge. Figuring out which services work together well and what are the integration points is another challenge. This leads to higher cognitive overload for engineering teams and requires a lot more investments in tools and manpower.
Vendor Lock-In – Each hyperscaler has proprietary services and APIs that can make migrations to other platforms time-consuming and costly. This can limit flexibility in the long term. Unless you are utilizing only the generic IaaS and PaaS services, this can lock you in from migrating to a different vendor or even adopting a multi-cloud/hybrid cloud strategy.
The complexity of Pricing – AWS, Azure, and GCP all have intricate pricing structures. Customers can find it challenging to accurately forecast costs, especially when applications dynamically scale or use multiple integrated services.
Enterprise-Focused Features – The hyperscalers often deliver robust solutions for large enterprises, but smaller startups, hobbyists, or cost-conscious businesses may find simpler solutions more desirable.
Support tiers and ETAs – Hyperscalers have multiple support tiers and response times depending on a matrix of criteria, which can sometimes be overwhelming and overpriced for SMBs and startups.

Does this mean that Hyperscalers are the big bad wolves? Not at all, for the right use cases and scale, there are no matches for Hypersclaers. As pointed out in the previous section there are features and services that not many other vendors in the industry can offer.

The underlying point in all these is that customers should evaluate what they need from a cloud vendor, and pick the right match. For a lot of startups, SMBs, and developers, the complexities and pricing challenge of hyperscalers can be a hindrance to business success and faster time to market. Their use cases usually require a foundational set of cloud services that should be simple and easy to manage. This is where alternate clouds come into the picture.

Alternate cloud providers

Alternate cloud providers are smaller and more specialized cloud providers that cater to startups, small and medium businesses as well as solopreneurs developers. So what are some of the feature that makes these providers the “alternate”?

Foundational cloud services – Most business requires a common set of foundational cloud services including VM and Kubernetes compute services, VPC, DNS and Loadbalancing network services, block and object storage, most common data store services, and key infrastructure services.
Price/Performance Advantage – There are definitive pricing advantages with alternate clouds. Sometimes these are lower costs for similar services, whereas in many cases, it is better performance against the same pricing from hyperscalers. Alternate Clouds offers a simpler and predictable pricing model that offers better control to the customer.
Avoid vendor lock-in – Most alternate vendors stick to open-source products and industry-standard APIs and interfaces that make moving and as well as moving out of them much easier than hyperscalers.
Developer-friendly – Alternate Clouds invests heavily in being developer-friendly and promotes ease of use to attract startups and solopreneurs.
Tailored and faster support – The comparatively smaller technology footprint and customer base make it easier for alternate clouds to provide faster and quality support to their customers. It also helps them offer customers tailor-made solutions to alleviate their technical and billing concerns.
One-click app marketplace – Most alternate vendors have app marketplaces from where you can deploy open-source and proprietary software solutions easily into your infrastructure.
Reasonable global presence – Small/alternate doesn’t mean that these vendors and not global. They do maintain regions/data centers in key geographies albeit with smaller footprints compared to hyperscalers. This enables the customers to plan for global scaling/disaster recovery/data locality etc.

Now that we have a way to identify what alternate clouds are and when to choose them, who are some of the players in this group?

In the cloud market share, out of the top 6 contenders, Oracle, IBM, and Alibaba are the trailing three, but they don’t exactly fall into the alternate cloud category we discuss here, as some of the complexities and cost problems we attributed to hyperscalars plague them as well. So let us look at some of the other players in the market.

Top Alternate Clouds

We are going to cover a few alternate clouds and their key offerings here, please note that it is not an exhaustive list.

Digital Ocean

Digital Ocean, popularly known as DO – a US-based cloud vendor founded in 2012 – started by offering simple VMs they call Droplets. They have been adding more core cloud functionalities to their offerings ever since. Their offerings include VMs, Kubernetes, Object Storage, Networking services, Managed databases, etc. In recent years they have been adding services like Serverless functions, application platforms, AI/ML, etc.
DigitalOcean has 12 data centers across nine regions. Known to be a very cost-effective platform, most of their services offer simple pricing models and in some cases even offer free services – a prime example would be that of their Kubernetes offering. DO doesn’t charge for the Kubernetes control plane whereas in most hyperscalers this would cost around 80-100$ per month per cluster. In a multi-environment, multi-region infrastructure, with an increasing number of clusters, the free control planes can lead to significant savings. If you need HA for your control plane, that could cost around 40$ which is still a lot cheaper comparatively.
DO enjoys a good community and has been a favorite of developers. They run an annual Hackathon called Hacktoberfest. It is a month-long event to encourage people to contribute to open source.

Linode

Linode is a Longstanding VPS Provider and has been in the VPS game for a long time, focusing on reliability and performance. Linode provides fixed-tier pricing, making it easy to select the right plan without surprise costs. The platform offers a straightforward user experience, community tutorials, and a strong focus on customer support. It was acquired by Akamai in 2021 and is now known as “Akamai Connected Cloud”.
Linode claims to offer Unmatched Price-Performance, Lower Egress Costs, Improved Margin Performance, and High Volume Data Transfers. On compute, Linode offers regular and GPU VMs, Kubernetes, and an Application platform. Like DO, Linode also doesn’t charge for their Kubernetes control plane. On the networking front, they offer DNS, Load balancers, private networking, DDoS protection, etc. Their database offers include MySQL and Postgres whereas the storage solutions cover block storage and object storage. Unlike many other cloud vendors, Linode offers Infrastructure Management services for the customer infrastructure. And top it all, they are backed by Akamais Global network of 4000+ Edge locations across 130+ countries.

Vultr

A prominent player in the global cloud market, Vultr calls itself “The Everywhere Cloiud” and boasts 32 locations worldwide. Their compute offer includes VMs, Baremental, GPUs, Kubernetes, and Serverless Functions. Their database offerings include MySQL, PostgreSQL, Valley, and Kafka. Similar to DO and Linode, Vultr also offers their Kubernetes control plane for free. They also offer the usual foundational network services like load balancers and VPCs.
Vultr offers automatic DDoS mitigation as a Service for a comparatively nominal price. A key network service offered by Vult is Direct Connect, which facilitates privately connecting Vultr to other cloud service providers, colocation facilities, or on-premises data centers. This service is something that most Hyperscalers provide but some of the Alternate clouds are still lagging behind. Their pricing is very competitive and is known to have one of the cheapest offerings on Virtual Machines.

OVHCloud

OVHcloud is headquartered in France and is popular among European businesses looking for local or EU-based data centers. They emphasize data sovereignty and compliance with GDPR and other regulations, which is critical for European organizations. It offers a range of products including VPS, dedicated servers, public cloud, and private cloud options. Unlike many other alternate clouds, OVH is also providing web hosting business as a core offering.
While OVH may not offer as many extensive services compared to their competitors, one of the distinct services offered by OVH Cloud is Private Cloud for enterprises that offer virtualization solutions like VMWare or Nutanix. Their core services like compute, object storage, networking, etc as significantly cheaper than competitors. They also have a global presence with 40+ locations across the world.
This list is not an exhaustive one, and the vendors are not listed in any particular order. There are several other players in the market, like Hetzner, HPE Greenlake, etc. There are also specialized vendors like Scaleway and Coreweave that focus on AI workloads. Cloudflare is a specialized alternate cloud, which started as a network and content distribution company but expanded into serverless compute and data platforms while also bolstering their security and traditional network services.

Chose Wisely

If you are choosing an alternate cloud, make sure that you evaluate your current and future requirements and see the services offered by them. Never go to an alternate cloud merely by the offer of a cheaper alternative. Evaluate services as well as the features they offer, see if they will suffice for your needs up to two years from now, and then make a call. At the end of the day, the Cloud is a utility for building and delivering software services. So evaluate it like you would do for any other software purchase choice you would make.

A lot of organizations use alternate clouds either as their primary cloud of choice or as part of their multi-cloud strategy. Whichever your use case is, StackBeaver can help you choose the right alternate cloud and support you in your alternate cloud journey.

Alternatives to Hyperscaler-cloud - Why choose them and what are the options?