What Enterprises Can Learn from Cloud Service Providers - Guest Blog by Giles Sirett, ShapeBlue CEO

Enterprises face a multitude of technology challenges when managing internal infrastructure and virtualization, that often hinder their ability to operate efficiently and innovate at scale. Legacy systems and technical debt can create barriers to efficiency. Cloud adoption, while beneficial, brings its own set of issues related to governance, performance optimization, efficiency and cost control, especially in large-scale multi-cloud or hybrid setups.

At ShapeBlue, we work with our customers to allow them to leverage massive value from the open-source platform, Apache CloudStack. Approximately 50% of our customers are Cloud Service providers (CSPs), the other half being enterprise organizations. Over a number of years, I have witnessed a common difference in mindset and approach between these two categories of organisations.

Large companies face mounting internal pressure to deliver scalable, secure, and cost-effective IT for immediate business requirements, and it is that pressure which can lead to a different mindset to that usually found in service providers.

In the last decade, many enterprises have effectively developed an internal service provider model. They are looking at making their operations more productive and look at the business models used in the service provider space for inspiration. What this usually  means is more automation, more self-service and fewer humans involved in every process.

But the problem I often see is, that whilst aspiring to learn from the service provider space, many organisations do not adopt their fundamental philosophies. Here, I have tried to outline the key differences in approach I see between enterprise organisations and service provider organisations.

 

Adopt a Service-First Mindset

Traditional enterprises often focus on the immediate requirements of the business: a new C-level initiative means building infrastructure, building data centers, deploying servers, and then figuring out service delivery. The business requirements of the organisation are met, and teams move on to the next project.

CSPs, on the other hand, take a fundamentally different approach. They start by identifying the services they want to offer, ensuring that those services appeal to a broad target market, and then design the infrastructure to support those services.

Enterprises can learn by flipping their thinking: instead of just focusing on the immediate requirements, they should be asking “What services can we provide to drive business growth long term?” or “What requirements may we have in 2 years”.

 

Foster a Culture of Continuous Innovation

CSPs thrive on constant innovation in products and solutions – essential for maintaining a competitive edge. The ever-present fear of disruption drives them to innovate continuously. In contrast, enterprises have traditionally been shielded from this pressure, often prioritizing immediate business demands over long-term innovation.

To stay competitive, enterprises should adopt a similar mindset by fostering a culture of experimentation. Innovation shouldn’t be confined to specific departments; it should be embedded as a core organizational value. Encouraging cross-functional collaboration, rapid prototyping, and agile methodologies can help enterprises anticipate future needs and enhance their ability to manage internal infrastructure effectively.

 

Prioritize Operational Efficiency Through Automation

Efficiency is not just an operational goal for cloud service providers – it’s a survival strategy. Automation reduces costs, minimizes human error, and enables scalability, and service providers know this because it’s the only way to deliver cloud services. In contrast, enterprises often struggle with legacy systems and manual processes that hinder agility – they want to automate, but it often comes second to the immediate demands of the business.

To address this, enterprises should adopt an “automate always” approach and invest in automation tools that streamline workflows, enhance service delivery, and improve resource utilization. Implementing Infrastructure as Code (IaC), self-service portals, and AI-driven monitoring systems can significantly boost operational efficiency.

 

Embrace Open–Source Technologies

Most CSPs have long recognized the danger of tying themselves to proprietary vendor technology for their core, customer-facing services. While there are many great proprietary technologies that often allow CSPs to develop new services quickly, the risk of vendors changing direction (whether technically or commercially), discontinuing technologies, or exiting markets altogether makes the potential disruption too great. Last year’s treatment of VMware Service Provider partners after the company’s acquisition by Broadcom is a great example of how businesses can suffer when a vendor shifts direction.

Most CSPs I work with at ShapeBlue instead favour open-source technologies. Beyond mitigating these risks, open source helps them maintain flexibility and accelerate innovation. It allows them to build exactly the services they want, rather than shaping their services around vendor-imposed functionality. CSP executives sleep well knowing they have full control over their product offerings across their entire stack.

However, enterprises have historically been hesitant, often defaulting to proprietary solutions due to perceived advantages in security and support. Deep-rooted technical knowledge and vendor relationships often make change difficult.

But the landscape has evolved. Open-source technologies now form the backbone of many critical systems, offering robust security, active community support, and rapid development cycles, while simultaneously eliminating the risks of relying on proprietary tech at the core of their systems. Enterprises can benefit by integrating open-source solutions to enhance agility, reduce costs, and retain control over their IT roadmap.

 

Avoid Vendor Lock-In for Greater Agility

Successful CSPs are cautious about becoming overly dependent on specific vendors, as this can limit flexibility and control over their service offerings. Enterprises should adopt a similar strategy, diversifying their technology stack to avoid being tied to a single vendor’s roadmap and pricing structures.

This approach not only mitigates risk but also fosters a more adaptable IT environment that can quickly pivot in response to changing business needs or market conditions.

 

“Don’t fall into cloud – think about cloud”

Although not strictly something that enterprises can learn from Cloud Service Providers, the approach to enterprise use of cloud services is an area that often comes up in conversations with customers.

Here is a genuine quote from a customer I worked with last year. The customer is a SaaS software company, and I’ve removed the specific cloud provider’s name:

“When we first started, it was so easy for us to just use [cloud provider] for everything. There was near-zero capex, and it allowed us to move very quickly to get the product into the market. Three years later, I’m spending $8M a year with them and have no idea how we can decouple ourselves.”

Consuming public cloud services is a part of any enterprise strategy. However, we often see organizations falling into ever-growing financial relationships with the three big hyperscalers. It’s no surprise – these companies offer a vast range of products, near-infinite scale, and are all obsessed with “hooking” companies in their startup phases. The problem is that growing organizations don’t think about cloud; they fall into it.

Enterprises usually find that beyond a certain threshold, running their own infrastructure is more economical – certainly for their core workloads. This realization has fuelled the growing trend of cloud repatriation, where organizations move workloads back from public clouds to private or on-premises environments.

 

We are also seeing a new generation of public cloud providers emerge, with much more flexible business and commercial models – much more likely to be able to partner with companies as they grow into enterprises.

 

“Design big. Build small.”

CSPs design their infrastructure with scalability and resilience at the core, enabling them to handle massive workloads and ensure high availability, and I’m sure most enterprises would say they do the same thing. But CSPs have learned that scalability isn’t just about being able to scale up rapidly; it’s about being prepared to do so while building a service that is cost-competitive.

At ShapeBlue, we use the mantra “design big, build small” – planning for rapid scale but building architectures that are only big enough to meet customer demand.

Enterprises can adopt similar principles, using some of the design strategies that CSPs use, Far too often, I see enterprises focusing on the “upside” of scalability but not on the requirement to keep built infrastructure as small as necessary.

 

In summary

Enterprises don’t need to become cloud service providers, but adopting their mindset can help drive transformation. By focusing on service-first strategies, fostering continuous innovation, embracing automation and open-source technologies, and strategically managing costs, enterprises can build IT ecosystems that are not just efficient but future-ready.

The shift toward a service-first mindset enables enterprises to focus on delivering long-term value. Automation and operational efficiency should be prioritized to reduce costs and improve agility, while open-source technologies offer flexibility and help avoid vendor lock-in.