According to a new survey from Gartner, the risk associated with dependence on a particular cloud provider for multiple business capabilities is in the top five emerging risks for firms — and for the second quarter running.

The technology research and consulting firm surveyed nearly 300 risk executives last month, garnering insights into their views on emerging risk or over-the-horizon risks. These have been presented in Gartner’s 3Q23 Emerging Risk Report.

Speaking on the findings and on concentration risk especially, Ran Xu, research director in the Gartner legal risk and compliance practice, said: “The risk associated with cloud concentration is fast losing its ‘emerging’ status as it is becoming a widely recognized risk for most enterprises.”

“Many organizations are now in a position where they would face severe disruption in the event of the failure of a single provider,” he continued.

Gartner suggested that cloud concentration risk has arisen due to many businesses opting to focus their IT efforts on a handful of strategic providers, as to reduce IT complexity, risk, cost, and skill requirements.

Compounding this is a handful of hyperscale vendors, which “dominate global and regional markets with superior technical capabilities, business reach and partner ecosystems,” Gartner said.

The research and consulting firm’s experts highlighted three main potential consequences stemming from overreliance on a single cloud provider.

The first is a “wide incident ‘blast radius,’” meaning that the more applications and processes which depend on a particular cloud provider, the greater the potential breadth of impact a cloud service issue could have.

The second is “high vendor dependence.” Concentrated dependency on a particular vendor can reduce future tech options, and allow vendors to “exert significant influence over the organization’s technology future.”

The third is “regulatory compliance failures.” Businesses may be unable to meet regulatory demands to address concentration risk across different regulatory bodies, according to Gartner, as the bodies may have different views on how to approach concentration risk.

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In response to the research, Xu advocated for businesses to have a “well-considered continuity place” in place.

“Currently, if the benefits of public cloud use are considered strategically important to a business, there are not many obvious solutions to remove the risk altogether.

“That’s why it is especially important that businesses have a well-considered continuity plan to put into action should they face any major cloud service issues,” advised Xu.

Alongside cloud concentration risk, third party viability and mass generative AI availability also feature in the list of the top five emerging risks for a second consecutive quarter, with third-party viability topping the list on both occasions.