Why Cloud Providers Are Hitting the 'Innovation Wall'

Why Cloud Providers Are Hitting the Innovation Wall.
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I’m your host, David Linthicum, Author, Speaker, and B-List Geek. Let’s get started.
Summary

The video explores how major cloud providers (AWS, Microsoft Azure, and Google Cloud) have potentially reached an innovation plateau after their groundbreaking developments in serverless computing and cloud-native architectures. The outline argues that these providers have transitioned from disruptors to defenders of market share, focusing more on optimizing existing products than creating revolutionary new technologies.

Bio

With over 30 years of experience in enterprise technology, David Linthicum is a globally recognized thought leader, innovator, and influencer in cloud computing, AI, and cybersecurity. He authorizes over 17 best-selling books, over 7,000 articles, and 50 courses on LinkedIn Learning. He is also a frequent keynote speaker, podcast host, and media contributor on digital transformation, cloud architecture, AI, and cloud security topics.

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Talking points:

Why Cloud Providers Are Hitting the Innovation Wall.
Welcome to the Cloud Computing Insider. This channel explores the ins and outs of cloud computing without an agenda or falling into the narrative set by “big tech” marketing. We look at what works, what does not, and the actual value of this technology in a balanced and information-forward way. If that interests you, please subscribe, like, and comment.

Introduction. 00:37

Research cited for this video: 03:27


The Innovation Story So Far: Riding on Past Breakthroughs. 05:42


Why the Innovation Wall is Real. 08:20
• Market Maturity:
• The cloud market is maturing, and innovations become harder when foundational problems have been solved.
• Saturation of key services and commoditization: Cloud services providers are competing less on innovation and more on price/performance ratios.
• Disruptor-to-Defender Transition:
• AWS, Azure, and Google are now dominant giants—becoming "defenders" of their market share rather than disruptors.
• Their focus is on optimizing existing products rather than inventing radically new technologies.

Why This Should Concern Enterprises. 10:25
• Enterprises are Betting on Cloud Innovation:
• Businesses are building strategies, applications, and infrastructure around cloud-native ecosystems, expecting continuous innovation.
• Heavy reliance on AWS, Azure, or Google Cloud ecosystems locks enterprises into platforms where innovation may stagnate.
• Economic and Competitive Implications:
• Risk of slowing competitive edge for enterprises: Enterprises tied to these platforms may find them insufficient for enabling new use cases (e.g., advanced AI/ML workloads).
• Cost-to-value imbalance: Investment in cloud solutions may yield diminishing returns without continued differentiation and innovation.

Recommendations for Enterprises. 13:20
• Diversify Cloud Strategy:
• Implement multi-cloud approaches to increase flexibility and mitigate stagnation in any one environment.
• Invest in In-House Expertise:
• Build internal development teams capable of innovating beyond the limitations of current cloud services.
• Pressure Cloud Providers:
• Enterprises should demand more from cloud providers, emphasizing innovation as a key differentiator.

Conclusion. 15:47

[ArturdeSousaRocha]

The absolute worst part that sorely needs innovation is the deployment lifecycle and control. One has to deal with Docker, Kubernetes, Ansible, Helm, Terraform, Prometheus and half a dozen other tools, each of which has a different philosophy. This stuff is pain. The meme of "Apple's single-button UI vs. your UI" comes to mind.

Next comes the risk of bankrupting yourself overnight. You can have alerts but you can't just put a hard cap on spending. Sure, downtime may put you out of business, but runaway compute is probably more dangerous. But it's not in cloud providers' interest to protect you here.

And finally features: The more useful, the more expensive, be it monitoring or storage or something else. Perhaps there is real correlation with technical costs, perhaps there isn't, but from what I've seen so far, the correlation with usefulness absolutely is real.

[theroboticscodedepot]

I think the "repatriation" of services back to in-house hardware is the first "bounce" of the ball back and forth between in-house and cloud. After a big pull back they will realize that some services are better suited to the cloud and some are better suited to in-house hardware platforms.

I am the developer and owner of Community Builder

a new social media - business Development - Networking platform

While I am very happy with the in-house services I'm looking at outsourcing video content to a cloud based CDN as that is a niche that requires HUGE bandwidth and is well suited to a cloud platform.

[KifranKober]

Thanks for this insight. But can you be more specific on the kind of innovation that - according to you - exists outside of the world of cloud providers ? Are you thinking about specific frameworks / stacks ? Applications ? Architecture patterns ? I'm wondering if this "lack of innovation" is specific to hyperscalers or more generaly attributable to the whole IT industry.

[future]

Isn't cloud basically a commodity at this point? I'm not sure it's reasonable to expect huge innovation from such a mature product. Further refinement, integration with new tech like "AI" and cost reduction is probably the focus

[TraianoLiberatore]

Cloud providers are now providing GPU compute power to take advantage of the a.i revolution.

[hovad]

innovating cost, cloud just someone else compute power. Like times before.