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.
