After attending a recent analyst and influencer event hosted by one of the major hyperscalers, I found myself reflecting not just on the future of the big cloud providers but also on the evolution of the entire cloud computing market. The event’s forward-looking presentations highlighted innovation among hyperscalers but also underscored a shifting landscape where new players and alternative cloud models are gaining traction.
It’s increasingly clear that the next phase of cloud adoption will be defined not just by the Big Three (Amazon Web Services, Microsoft Azure, and Google Cloud) but by an ever-expanding array of specialized and alternative cloud solutions. For more than a decade, the Big Three’s dominance has been so pervasive that, for many, the term cloud has become synonymous with one or more of these platforms. Yet, forces are at work that promise to upend this hegemony. Chief among these is the emergence and acceleration of what I call the “alt clouds,” a diverse range of private, sovereign, specialized, managed, or colocated cloud offerings that are now gaining notable traction against the industry’s largest incumbents.
What are the alt clouds?
Alt clouds, in their various forms, represent a departure from the “one size fits all” mentality that initially propelled the public cloud explosion. These alternatives to the Big Three prioritize specificity, specialization, and often offer an advantage through locality, control, or workload focus. Private cloud, epitomized by offerings from VMware and others, has found renewed relevance in a world grappling with escalating cloud bills, data sovereignty requirements, and unpredictable performance from shared infrastructure. The old narrative that “everything will run in the public cloud eventually” is being steadily undermined as organizations rediscover the value of dedicated infrastructure, either on-premises or in hosted environments that behave, in almost every respect, like cloud-native services.
Sovereign cloud providers are another critical strand in the alt cloud tapestry. These companies, such as the European upstart Lidl (a grocery store creating a public cloud offering) or various regional initiatives across Asia and the Middle East, emphasize guaranteed data residency, local regulatory compliance, and protection from foreign surveillance.
In a world where geopolitics increasingly intersect with information technology, the assurance of a “home jurisdiction” for sensitive workloads has become a compelling value proposition for governments and multinational companies alike. Driven by new and often stricter regulatory regimes, these sovereign clouds are not mere niche players; they’re fast becoming anchors for entire industries and economies.
Perhaps the most visible and dynamic expansion in the alt cloud category has come from specialized providers. Take CoreWeave, for example, a company that saw the generative AI wave coming and doubled down on building infrastructure specifically optimized for high-performance GPU workloads. CoreWeave, along with similar AI-centric platforms, has become the provider of choice for companies and research labs specializing in machine learning and large language models. They are drawn to performance guarantees and configurations that the hyperscalers have been slow to offer or price effectively. This pattern is likely to echo across other verticals as enterprises seek clouds tailored for healthcare, financial services, gaming, or media.
We cannot discuss the expanding alt cloud universe without acknowledging the crucial role of managed service providers and colocation companies. As more businesses embrace hybrid and multicloud strategies, managed service providers have stepped up to help them stitch these disparate environments together, delivering integration, migration, security, and ongoing management as a service. Similarly, colocation providers extend cloudlike flexibility to enterprises with legacy investments in physical hardware or requirements for specialized network performance. Together, these organizations bridge the gap between traditional data center and cloud-native models, showing that the cloud is as much about management, scalability, and consumption models as geography or ownership.
Why enterprises choose alt clouds
This multipronged expansion of the alt cloud sector is translating into real, measurable momentum. Although the hyperscalers continue to control the largest share of workloads, recent market data reveals high double-digit growth for alt clouds, particularly in regions and verticals where the limitations of the public cloud model have become apparent. The drivers for this shift are not theoretical. Enterprises dealing with escalating egress fees, inflexible service boundaries, and increasingly complex needs are recognizing that a portfolio of clouds—private, sovereign, specialized, and managed—can yield real cost-efficiency, agility, and even innovation. By seeking the best-fit solution for each workload, they optimize for performance, regulatory fit, risk tolerance, and, often, price.
This trend is likely to continue. In the next three years, I expect alt cloud adoption to accelerate for several reasons. First, digital sovereignty is only going to become more important as international tensions and regulatory scrutiny continue to rise. Second, specialization will reward providers that can closely align their offerings with the distinct requirements of high-value workloads such as generative AI, real-time analytics, or regulated industries. Third, rising public cloud costs driven by system complexity, unpredictable usage, and expensive value-add services will force more enterprises to look for alternative solutions. Finally, innovation in how cloud resources are consumed and managed, particularly through the use of automation and abstraction layers, is reducing the friction that once made multicloud and hybrid deployments feel unmanageable.
Greater complexity and consolidation
This proliferation of cloud options is not without its challenges. Perhaps the main one to watch is operational complexity. Every new cloud platform added to the IT portfolio comes with its own set of APIs, billing systems, security models, compliance standards, and performance quirks.
What begins as cost optimization or risk mitigation can quickly become an administrative burden, soaking up engineering time and escalating management costs. Enterprises embracing heterogeneity have no choice but to invest in architects and engineers who are familiar not only with AWS, Azure, or Google, but also with VMware, CoreWeave, a sovereign European platform, or a local MSP’s dashboard. There is a very real learning curve, and a growing need for sophisticated cloud management platforms and orchestration tools that can bring disparate environments under a unified umbrella.
Furthermore, we must acknowledge the prevailing pattern of consolidation within the industry. As certain alt cloud providers reach critical mass, they become prime acquisition targets for the very hyperscalers or legacy tech companies they meant to challenge. This can be both a blessing and a curse. Absorption into a larger player can bring access to scale, capital, and broader ecosystems, but risks undermining the differentiation that initially attracted customers to the alt cloud in the first place.
In talking with customers and enterprises around the world, a clear consensus is emerging. The benefits of the alt cloud expansion—flexibility, specialization, cost efficiency, and reduced vendor lock-in—are real and tangible. The dangers—operational overstretch, skills shortages, and industry consolidation—are equally pressing. Ultimately, this double-edged sword will require active, ongoing management. To succeed, enterprises must treat cloud choices as a deliberate, strategic exercise, investing in talent and tools to unify their environments and maintaining discipline about why they place certain workloads on certain platforms.