Why don’t cloud providers integrate?

As I noted recently, AWS seems to be getting religion about “integration as an essential product feature.” There’s plenty of progress to be made, but it feels like the exact right thing for AWS to do. The question is why isn’t everyone doing it? As I said, “The tech industry has spent decades watching Apple, Microsoft, and others ignore competitive products outside their own walled gardens.” That’s on the consumer side (privileging first-party browsers, apps, etc.), but the same holds true for the enterprise.

Except in the enterprise, it’s baffling. You might, for example, find a consumer that is willing to cede every aspect of their mobile experience to Apple (hardware, operating system, apps, etc.), but no enterprise in history exclusively uses one vendor’s tech, no matter how “all in” they may publicly proclaim themselves. Enterprise IT simply doesn’t work that way. So why aren’t technology vendors more inclined to meet customers where they are? Why not focus on integrating with competitive products rather than insisting on some utopian mono-vendor future that will never, ever come to pass?

Zero-sum thinking

I’m sure there are good explanations for why this happens. For example, it’s easier to control a customer experience if you control the moving parts. This was perhaps easier in the pre-cloud world when vendors would ship software and push the responsibility for operating it to customers. In a cloud world, by contrast, Google, AWS, and Microsoft take on the “undifferentiated heavy lifting” (to use AWS’ favorite phrase) of operating the code for customers. This is tremendously more difficult and arguably makes it harder to integrate third-party services without breaking the overall customer experience.

And yet, some vendors manage. Although it’s not an apples-to-apples comparison, Google’s Athos enables enterprises to run applications across clouds and other operating environments, including ones Google doesn’t control. As with Amazon DataZone, it’s very possible to manage third-party data sources. One senior IT executive from a large travel and hospitality company told me on condition of anonymity, “I’m sure [cloud vendors] can integrate with third-party services, but I suspect that’s not a choice they’re willing to make. For instance, they could publish some interfaces for third parties to integrate with their control plane as well as other means in the data plane.”

Integration is possible, in other words, but vendors don’t always seem to want it.

This desire to control sometimes leads vendors down roads that aren’t optimal for customers. As this IT executive said, “The ecosystem is being broken. Instead of interoperating with third-party services, [cloud vendors often] choose to create API-compatible competing services.” He continued, “There is a zero-sum game mindset here.” Namely, if a customer runs a third-party database and not the vendor’s preferred first-party database, the vendor has lost.

Such thinking makes sense for vendors, but it makes zero sense for customers. And because it makes no sense for customers, it’s doubtful it actually benefits the vendors. So, what would?

Connecting with abundance

Think about your average IT shop. Whether through shadow IT, mergers and acquisitions, changing IT policies, or other reasons, enterprises tend to run a mishmash of different databases, operating systems, clouds, developer toolchains, etc. The vendor that accepts this as reality and helps customers manage this complexity effectively may have the best “lock-in” of all: the kind that makes enterprise customers’ lives easier, not harder.

The most persistent lock-in for enterprises isn’t about a software license. As Gartner analyst Merv Adrian once said to me, referring to databases, “The greatest force in legacy databases is inertia.” And it’s not just databases. Once an enterprise has made a technology choice, the friction associated with changing to something else often overwhelms the best intentions.

This is good if you’re the incumbent, right?

To an extent, yes, but no vendor is in the position of sitting on a lead and hoarding customer workloads. Particularly in cloud (still just 6% of global IT spending), and especially now with the macroeconomic situation deteriorating, the key to boosting revenue is to bring in new workloads. What’s an ideal way to do that? Connect with the software and systems a customer already uses, thereby reducing the friction associated with introducing new technology. In other words, the path to success is to embrace and extend complementary or competitive products rather than wishing they didn’t exist.

This is particularly true of cloud vendors. I’ve argued that “the cloud providers that create the biggest ecosystems and partner networks will be the ones at the top.” Microsoft CEO Satya Nadella has trumpeted this sentiment, stressing that “the real world is not some homogeneous Microsoft infrastructure world. It is a multicloud, multiplatform world.” The hyperscale clouds need to figure out how best to enable companies and communities to thrive on their platforms rather than trying to reinvent the wheels a customer already has (or wish them away).

In 2023, integration will be critical. The clouds and other technology providers that do this well will win over more customer workloads than vendors that aim for a single-vendor world that will never come.  

Copyright © 2022 IDG Communications, Inc.


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