It’s not every day we witness a cloud provider abruptly closing its doors. Yet, that’s exactly what happened when NetEase, a Hangzhou, China-based internet and gaming giant, announced it was shutting down its public cloud service. As of April 7, 2025, the platform will go offline permanently. Clients are being encouraged to migrate to other services. Although this move is limited to a small number of clients in mainland China, it raises broader questions about how businesses should safeguard themselves from the risks associated with a cloud vendor shutdown.
The consolidation of the cloud computing market from 2010 to 2013, as smaller providers faced difficulties competing with major players such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, reflects the challenges we see today. After the initial boom in the public cloud market, many smaller, niche providers struggled to compete with the significant investments and economies of scale achieved by the larger players. Customers began gravitating toward providers with robust infrastructures, global reach, and extensive service offerings, leaving smaller players unable to scale profitably or invest in cutting-edge features.
During this period, several cloud companies exited the public cloud space altogether. Notable examples include Nirvanix, a cloud storage provider that shuttered operations in 2013, GoGrid, which pivoted to focus on data services and left the public cloud market, and Joyent, which sold its cloud business after failing to compete with hyperscalers. They all had customers who needed to quickly figure out an exit strategy.