Public cloud becomes a commodity

Since the dawn of the public cloud era, the narrative has focused on disruption and innovation. The Big Three providers (Amazon Web Services, Microsoft Azure, and Google Cloud) have commanded center stage by captivating customers and analysts alike with their relentless rollout of new features and services. The implication has always been clear: Stick with the largest, most innovative providers and take advantage of capabilities you can’t find anywhere else.

Yet, those of us who consistently talk to enterprise CTOs, architects, and IT teams see a reality very different from all the marketing hype surrounding bleeding-edge services such as advanced serverless platforms, proprietary AI accelerators, and vast analytics ecosystems. Those shiny, specialized tools advertised at launch events rarely make it into meaningful production deployments. Most actual cloud consumption focuses on a handful of basic services. In the real world, enterprises gravitate toward virtual machines, object storage, databases, networking, and security features.

The reasons are diverse. IT teams primarily manage mission-critical workloads that require reliability, security, and scalability. This creates pressure to reduce risk and complexity, making it impractical to adopt a constant stream of new, sometimes underdeveloped features. Most organizations rely on established solutions, leaving a long tail of innovative services underused and often overlooked. If anything, this demonstrates that the day-to-day needs of most enterprises are surprisingly consistent and relatively straightforward, regardless of industry or region.

What about AI?

AI was expected to change the game by providing a true differentiator for the major cloud players. It’s easy to believe that AWS, Azure, and Google Cloud are now as much AI companies as they are infrastructure providers, given their levels of investment and marketing enthusiasm. However, if you step back and examine the actual AI workloads being deployed in production, a pattern emerges. The necessary toolsets and infrastructure—GPU access, scalable data storage, major machine learning frameworks—are not only widespread but are also becoming increasingly similar across all public clouds, whether in the top tier or among the so-called “second tier” providers such as IBM Cloud and Oracle.

Additionally, access to AI is no longer genuinely exclusive. Open source AI solutions and prebuilt platforms can operate anywhere. Smaller public cloud providers, including sovereign clouds tailored to a country’s specific needs, are offering essentially similar AI and ML portfolios. For everyday enterprise use cases—fine-tuning models, running inference at scale, managing data lakes—there’s nothing particularly unique about what the major clouds provide in comparison to their smaller, often less expensive competitors.

Sticker shock

This brings us, inevitably, to cost, a topic no cloud conversation can avoid these days. The promise of “pay only for what you use” was initially a significant driver of public cloud adoption, but enterprises are waking up to a new reality: The larger you grow, the more you pay. Detailed invoices and cost analysis tools from the Big Three resemble tax documents—complicated, opaque, and often alarming. As organizations scale, cloud bills can quickly spiral out of control, blindsiding even the most prepared finance teams.

The persistent cost challenges are shifting the mindset of enterprise IT leaders. If you’re only using basic cloud primitives such as compute, networking, storage, or managed databases, why pay a premium for the marquee provider’s logo on your invoice? This question isn’t theoretical; it’s one I hear frequently. Enterprises are discovering that the value promised by the most established public clouds doesn’t align with reality, especially at the enterprise scale, given today’s prices.

The second-tier providers are stepping in to fill this gap. IBM and Oracle, for example, have shown remarkable growth in the past few years. Their product offerings may not match the sheer breadth of Microsoft, AWS, and Google, but for core use cases, they are just as reliable and often significantly less expensive. Furthermore, their pricing models are simpler and more predictable, which, in an era of cost anxiety, is a form of innovation in itself. Then there are the sovereign clouds, the regional or government-backed solutions that prioritize local compliance and data sovereignty and offer precisely what some markets require at a fraction of the cost.

MSPs and colos are still in the game

Managed service providers and colocation vendors are also playing a surprising role in this shift. By providing hybrid and multicloud management as well as hosting services, they allow enterprises to move workloads between on-premise environments, colocated data centers, and multiple public clouds with minimal concern about which cloud supports each particular workload. These players further diminish the idea of differentiation among cloud providers, making the underlying infrastructure a nearly irrelevant commodity.

What are the implications? The commoditization of public cloud isn’t just likely; in many respects, it’s already here. Competing solely on raw innovation and feature count is losing its effectiveness. Enterprises are indicating through their purchasing behavior that they want simplicity, reliability, and predictability at a fair price. If the major cloud providers don’t adapt, they’ll find themselves in the same situation traditional server and storage companies did a decade ago: struggling to differentiate what customers increasingly view as a commodity.

AWS, Microsoft, and Google will not disappear or shrink dramatically in the short term. However, they may need to reevaluate how they deliver value. I expect them to double down on managed services, application-layer offerings, and industry-specific solutions where differentiation truly matters. The rest—the core plumbing of the cloud—will increasingly be driven by price, reliability, and regulatory compliance, much like electricity or bandwidth today.

The next phase of cloud computing will belong not to those with the most features or the loudest marketing campaigns, but to those providers, big or small, that best understand enterprise needs and can deliver on the fundamentals without unnecessary complexity or excessive costs. That’s good news for the rest of us. The public cloud isn’t just another technology wave; it’s becoming an everyday utility. For enterprises, that’s precisely how it should be.