Credit cards are now the dominant method of purchasing cloud computing services

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Credit card and alternative payments are more common with the second-tier cloud providers than with the cloud giants.

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For generations, companies purchased information technology through regular corporate purchasing channels. Because IT procurement was a big, complicated deal.

The advent of cloud services turned formal procurement processes upside down, allowing users to purchase technology access via credit cards. The question is, how widespread are more informal cloud purchases? We finally have data on that, courtesy from Mike Maney at Linode/Akamai.

A questionnaire of 458 development professionals, managers and senior leaders in 20 industries, commissioned by Linode/Akamai, show growing interest in alternative cloud payment methods, especially among smaller businesses. There is an increasing interest in alternative payment methods in the cloud. More than half of the survey respondents (52%) use credit cards to pay for cloud services, and 48% “want” to use this payment method. 47% use formal contracts and RFPs.

Alternative payments such as UPI, PayPal, Venmo and cryptocurrencies account for a quarter (25%) of payments. Another 36% would like to purchase more cloud services in this way. At the moment, 9% actually buy cloud services with cryptocurrencies and 16% want to do it this way.

Perhaps unsurprisingly, smaller companies are more likely to purchase cloud services through credit cards — 71% of the smallest companies in the study, with fewer than 50 employees, use credit cards. This compares to 24% of larger companies with 5,000 to 10,000 employees.

Interestingly, though, credit card usage is resurfacing for organizations with more than 10,000 employees — up to about 40%. “It’s likely that these giants have multiple, independent businesses and buyers who want access to cloud resources without red tape and credit card fees,” the study authors speculate.

Credit card and alternative payments are more common with the second-tier cloud providers than with the cloud giants (AWS, Google, Microsoft). At least 68% of respondents who use second-tier providers say they use alternative payments or cryptocurrencies, compared to 31% for the three largest cloud providers. One likely reason is that alternative cloud providers may be more flexible in the payments they accept than hyperscalers with massive infrastructures.

Nearly every merchant takes major credit cards, the survey shows. Wire transfers are also widely accepted. Many suppliers offer different prepaid and contract models. Perhaps even more surprisingly, the only alternative payment that is somewhat widely accepted is the most established: PayPal. But not by the Big Three. Google Pay is a distant second. (Ironically, you can’t use it to pay for Google Cloud Platform. ).”

Here’s the overview of who accepts what:

  • AWS Alternative payments: No | cryptography: No | credit cards: Yes
  • azure blueAlternative payments: No | cryptography: No | credit cards: Yes
  • Google Cloud Alternative payments: PayPal (only as a backup) | cryptography: No | credit cards: Yes
  • Digital Ocean Alternative payments: GooglePay, PayPal, ApplePay | cryptography: No | credit cards: Yes
  • Equinix Alternative payments: No | cryptography: No | credit cards: no
  • Hetzner Alternative payments: PayPal | cryptography: No | credit cards: Yes
  • linode Alternative Payments: GooglePay, PayPal | cryptography: No | credit cards: Yes
  • OVHcloud Alternative payments: PayPal | cryptography: No | credit cards: Yes
  • UpCloud Alternative payments: PayPal | cryptography: No | credit cards: Yes
  • Vultr Alternative payments: AliPay, PayPal | Crypto: BitPay (BTC, BCH, ETH, DOGE, PAX, BUSD, LTC, USDC, GUSD) | credit cards: Yes

“The report provides some insights into the need for cloud providers to support new payment methods, accompanied by a growing interest in alternative cloud providers,” said Maney.

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