Story Highlights:
- Centralized cloud giants control 65% of the market, limiting innovation and increasing business dependency risks.
- Decentralized alternatives like Store offer scalable, democratic cloud infrastructure, reducing reliance on major providers.
- Embracing decentralization in cloud computing can enhance innovation, data security, and regulatory compliance across industries.
Electronic computing and artificial intelligence have immensely changed how enterprises view data and operations within a short period. However, these innovations are gradually centralizing into the hands of a few players which is a paramount question that the technology industry seeks regarding centralization.
The Dominance of Tech Giants in Cloud Computing
The cloud computing market is heavily dominated by three major companies: AWS, Microsoft Azure, Google Cloud, etc. Altogether, these giants own more than 65% of the global market, while the biggest share, 31%, belongs to AWS. This accumulation of power has a negative impact on competition and innovation as more numerous companies take on the technical and financial might of industry heavyweights.
This situation poses several business risks mainly because a few cloud providers control the market. For instance, Dropbox, a company that started leveraging AWS infrastructure, encountered multiple problems as it grew. This is an expensive process, and due to the high costs and limitations exerted by AWS, Dropbox has had to establish data centers in a move that might not be tenable to most emerging companies. This scenario explains the negative impact of centralization on the firm’s growth and development and heightened operations risks.
Political and Regulatory Challenges
Reliance on centralized hardware and software systems also poses political risks to organizations. AWS deactivated services on the social media platform Parler in January 2021, citing content moderation concerns and pulling out the platform. Such occurrences show that outsourcing with a single supplier puts the firm’s operations in a critical position. Hyperscaling public cloud environments results in compliance issues because the data is stored on centralized infrastructures that are sometimes geographically proximal to the regulated area, such as the EU for GDPR.
Decentralized Solutions: A Path Forward
Depending on the decentralization, new cloud computing models are beginning to appear as new approaches to combat the dangers of centralization. One example is Store, a decentralized network that provides accessible, inexpensive, scalable cloud infrastructure. Store’s network comprises several data centers offering extensive storage and computation potential, which may be important to businesses that seek to decrease their reliance on primary providers.
Cloud computing and AI’s future is centralized. Since decision-making and ownership are decentralized in these work models, innovation can increase while data protection and compliance with the rules can also be achieved. Implementing these solutions will help construct a stable and independent technological system in the industry’s development.
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