Core public cloud services have become commoditized
Infrastructure isn’t where the value is anymore. Ask any CTO managing real production workloads, they’re not excited about the latest proprietary AI accelerator or obscure serverless function. What they care about are the basics: compute, networking, storage, security, and reliable database solutions. Those are the workhorses, and across almost all cloud providers, whether it’s AWS, Google Cloud, or Oracle, they look and operate pretty much the same.
This is a shift worth paying attention to. The idea that you need to stick with the Big Three to get innovation is outdated. Sure, AWS might announce a new service every other day, but enterprises aren’t adopting them at scale. Why? Because they don’t need 1,000 experimental tools, they need a cloud that runs 24/7, scales smoothly, answers to compliance requirements, and doesn’t go down when traffic spikes. The vast majority of organizations have decided: give us mature, stable, boring systems that just work.
The story here is straightforward. If every provider is good at the basics, then the infrastructure itself becomes a commodity. What matters more is how it’s delivered, how clearly it’s priced, and how well it aligns with what businesses actually need.
For executives running large-scale systems, the lesson is clear: spending time differentiating between similar infrastructure services is often a waste. The winners in this space will be those who remove friction, simplify integration, and provide consistently high performance and security. If your business runs on compute and storage, and let’s face it, most do, then the cloud solution you choose should depend on cost, transparency, and support, not on whether they just launched another beta AI engine with a flashy demo.
AI offerings no longer provide unique competitive advantages for top cloud providers
There’s been a lot of noise about AI taking over the cloud space. AWS, Microsoft, and Google would love for you to think choosing their platform gets you exclusive access to next-gen AI. That used to sound compelling. Not anymore.
The reality on the ground is different. If you’re building or deploying AI workloads, you need GPUs, fast storage, data pipelines, and support for machine learning frameworks like TensorFlow or PyTorch. Every major provider, including IBM, Oracle, and regional sovereign clouds, has caught up on these basics. They all offer scalable infrastructure and support for the same open tools. There’s no real moat here anymore. If you’re training models or running inference at scale, you can do that from almost anywhere. What’s more, open source models and marketplace platforms have made it dead simple to move your entire AI stack to the environment that best fits your budget and compliance needs.
So here’s the shift: AI is no longer a reason to pay a premium to a cloud provider just because of their branding. Unless you need a very specific, tightly integrated enterprise AI service, you’re not missing out by using Oracle Cloud or some other regional platform. And enterprises are catching on to this.
Boardrooms should ask the hard question: if AI tools are standardized, what’s your actual value from staying locked into a specific cloud environment for AI? Depending on your industry, regulatory setup, and data needs, a smaller provider might offer more control, more privacy, and better prices, with zero downgrade in capability. The companies that figure this out early will save significant resources and move faster. The smart play is to focus on deploying and tuning AI in ways that drive business outcomes, not on who hosts your GPUs.
Enterprise cost concerns are driving interest in second-tier and regional cloud providers
When cloud first took off, the pitch was clear: pay only for what you use. That worked fine in the early stages, when businesses were testing workloads or scaling in small increments. But now, for large enterprises running full operations in the cloud, it doesn’t look that simple. At scale, the cost model has become harder to predict. Many organizations are seeing bills far higher than expected, dense with line items, pricing tiers, and hidden complexities that make forecasting unreliable and financial planning difficult.
That’s pushing enterprises to take cost seriously, not just at the invoicing level, but at the strategic level. If all you’re using are foundational services like compute, networking, storage, and managed databases, you start questioning whether you’re getting enough return on premium pricing. And in many cases, the answer is no.
This is where second-tier cloud providers like IBM and Oracle are gaining ground. They offer the same table-stakes services with simpler pricing, less ambiguity, and in many cases, significantly better predictability. Combine that with increasing pressure from boards and CFOs to get spending under control, and it’s easy to see why more CIOs are testing alternative platforms. In some markets, sovereign clouds are also attracting demand, not just for compliance reasons, but because they deliver operational value for less.
C-suite leaders should be directly involved in reassessing cloud spend. What may appear efficient on the surface can turn into unchecked spend at scale. Execs who build strong alignment between finance, operations, and IT will gain more control and flexibility. It’s also the right time to challenge old assumptions, real innovation sometimes means cutting unnecessary complexity and shifting to platforms that operate with clarity and cost discipline. The Big Three are still strong, but their pricing structure is starting to become a liability. Being locked into an expensive default choice is no longer justifiable.
Managed service providers (MSPs) and colocation vendors are reducing cloud provider lock-in
There’s been progress in breaking down traditional cloud dependencies. Managed service providers and colocation vendors are now supporting enterprise cloud strategies in ways that make single-vendor reliance far less necessary. These players offer hybrid and multicloud solutions that let organizations move workloads across on-premise data centers, public clouds, and colocation sites, without introducing added complexity or friction.
This flexibility matters. It gives businesses options. It means infrastructure isn’t tied to one provider’s ecosystem or licensing model. If one cloud’s pricing jumps or its roadmap no longer aligns with your needs, you can pivot. MSPs are also handling more of the heavy lifting, delivering governance, security, and compliance as part of an integrated service. That’s valuable for enterprise teams that want continuity and portability baked into their environments.
The technical layer is becoming abstracted, and that’s a good thing. We’re seeing decoupling of workloads from the infrastructure provider, allowing companies to lean into what’s best for the business, better uptime, better data control, and better negotiation leverage.
Executives should factor MSPs and colocation capabilities into their long-term IT planning. Not as a workaround, but as a foundation. Any infrastructure strategy that only works within one provider’s framework is now a risk. The message is clear: tie your stack to business priorities, not just to the vendor installing it. Leaders who adopt more flexible, decoupled ecosystems can protect themselves from volatility in pricing, policy shifts, or service deprecations. Long-term resilience depends on optionality, and that’s what these alternative infrastructure partners are now delivering at scale.
Cloud providers must refocus on value delivery beyond infrastructure to remain competitive
Public cloud infrastructure, compute, storage, networking, is no longer a differentiator. It works. It’s everywhere. The performance across leading platforms is nearly identical for standard workloads. That’s not where the future competition is. For cloud providers to stay relevant, especially the Big Three, they need to shift their energy toward services that actually move the needle for enterprises: managed solutions, industry-specific applications, workflow integration, and customized support at the business layer.
Right now, most enterprises aren’t asking for a thousand new features, they’re asking for systems that reduce management overhead, support compliance across multiple jurisdictions, and tie directly into their vertical needs. That’s where enterprise cloud is heading: less about raw building blocks, more about business outcomes delivered through the cloud. Application-level services, especially those built for industries like healthcare, manufacturing, and financial services, will be key to driving actual value.
If AWS, Microsoft, and Google want to maintain their position, they’ll need to get sharper about serving these enterprise segments. The companies that win here will build platforms that understand business workflows, improve time-to-value, and reduce operational drag. It’s not just about scaling compute anymore, it’s about scaling impact.
C-suite leaders should raise the bar on what they expect from a cloud partner. Standard infrastructure delivery is basic, it should be assumed. The time has come to demand more targeted solutions, better alignment to business strategy, and clear support paths that don’t require excessive internal resourcing. IT spending is increasingly outcome-driven. If an offering doesn’t directly accelerate growth, compliance, or operational efficiency, it’s no longer strategic. Leaders who align cloud partners with evolving business mandates, not with brand familiarity, will build long-term leverage in crowded, fast-moving markets.
The public cloud is evolving into a utility-like service
Cloud computing is no longer new. It’s operational. It’s embedded. It’s universally adopted. And it’s now hitting a stage where it behaves like a utility, delivered on-demand, standardized across providers, and judged primarily on reliability, cost, and availability. That’s not a weakness; it’s a signal that the cloud has matured to a point where enterprises view it as infrastructure, just another part of their business backbone.
What’s changed is perception. A few years ago, cloud was seen as a driver of innovation. Today, for many enterprises, it’s taken for granted. That doesn’t mean it’s less important, only that the bar has moved. The focus now is on ensuring that these systems are stable, cost-effective, flexible, and secure, with providers judged on operational delivery rather than feature volume. Enterprises want less complexity, more transparency, and predictable cost structures.
In this environment, a provider’s ability to compete will depend less on marketing and more on fundamentals. Fast provisioning. Zero unplanned downtime. Clean billing. Flexible compliance. That’s the value. The landscape is becoming more democratic, which means smaller, focused providers can now stand toe-to-toe with legacy leaders when it comes to support and capability.
For executives, the shift to utility-mode cloud changes the game. It means cloud investment should be approached like any core service, evaluate vendors based on outcomes, not pitch decks. Focus on price-to-performance ratio, provider support, and operational control. And make decisions that prioritize future adaptability. You don’t need more cloud features, you need stability, accountability, and service that matches business pace. Leaders who stop chasing novelty and start optimizing for consistency will find better long-term ROI and less operational debt.
Key takeaways for decision-makers
- Cloud infrastructure is no longer a differentiator: Most enterprises rely on just a few core services, compute, storage, networking, and these are now functionally identical across providers. Leaders should reassess cloud partnerships based on cost, reliability, and support, not marketing claims about innovation.
- AI capabilities have reached functional parity across providers: Advanced AI workloads no longer require a top-tier provider as open-source tools and GPU access are widely available. Executives should focus AI investments on use case relevance, not vendor branding.
- Cloud spending is outpacing its strategic value: As scale increases, so do cloud costs, particularly with opaque pricing from the Big Three. Leaders should evaluate second-tier and sovereign providers to reduce long-term cost and gain pricing clarity.
- Managed service providers are eroding cloud lock-in: MSPs and colos enable smooth movement across hybrid and multicloud environments without added complexity. Decision-makers should embrace infrastructure flexibility to improve leverage and reduce vendor dependency.
- Future competitive value lies above the infrastructure layer: With foundational services commoditized, cloud providers must deliver managed services, vertical solutions, and clearer business alignment. Leaders should demand industry-specific offerings and measurable outcomes from cloud partners.
- Cloud is becoming a utility-grade service: Enterprises now value performance, simplicity, and predictability over endless features. Leaders should treat cloud as essential infrastructure and optimize vendor selection for cost control, uptime, and compliance.
