Cloud Concentration Risk: The Next Supply Chain Crisis Nobody’s Talking About

Executives love to tout their cloud migrations. The slide decks glow with stories of agility, cost savings, and AI-ready platforms, all riding on the back of major cloud providers.

What doesn’t make the cut? The fact that most enterprises are now dangerously concentrated in the hands of just one or two vendors.

That’s cloud concentration risk. And it’s shaping up to be the next supply chain crisis.

Here’s the problem: supply chains taught us what happens when critical dependencies cluster. One factory shuts down, one shipping lane clogs, and suddenly every CEO is explaining shortages they didn’t see coming. Cloud isn’t immune.

A regional outage, a compliance dispute, or a geopolitical flashpoint can instantly take out core systems. For some companies, that’s payroll. For others, customer data, manufacturing lines, or the AI models embedded in their operations.

We hear it repeatedly in strategy circles: “Our whole business runs on AWS. If something happens, we have no fallback.”

Three places this risk bites hardest:

• Core systems dependency.  When ERP, finance, and HR all sit in one cloud, an outage doesn’t just stall operations, it paralyses decision-making.

• Regulatory choke points.  A single compliance breach can cascade into fines, restrictions, or forced migration, overnight.

• Geopolitical fragility.  Providers caught in trade disputes or cross-border data battles can become unintentional hostages.
  

So what do you do about it?

• Build multi-cloud as insurance, not luxury.  You don’t need symmetry, but you do need optionality. Treat backup platforms like alternate suppliers in a supply chain.

• Invest in sovereign and edge options.  Especially in markets with regulatory volatility. A lightweight regional footprint can be the difference between continuity and shutdown.

• Design hybrid deliberately.  Keep mission-critical workloads split, some on-prem, some cloud, so no single provider can hold the business hostage.

• Scenario test for outages.  Run the fire drill: what if Cloud A goes dark for 48 hours? Who reroutes, what fails over, what’s the business continuity plan?
  

The hard truth: cloud isn’t just infrastructure, it’s dependency. And strategy leaders can’t afford to treat concentration as an IT problem.

The winners? They won’t be the firms boasting fastest migration. They’ll be the ones who rehearsed the failover, diversified their dependencies, and treated cloud resilience like supply chain resilience.

Because when the next outage hits, it won’t matter how fast you moved to the cloud, only how fast you can move off it.

TL;DR Cloud concentration is a silent systemic risk. Build multi-cloud optionality, test outage scenarios, and align cloud decisions with supply chain resilience thinking. Otherwise, your digital backbone could become your single point of failure.