An article has been making the rounds among tech professionals on the cost of using cloud solutions. The Cost of Cloud, a Trillion Dollar Paradox analyzes the cost of cloud over the short and long-term to evaluate the validity of cloud computing’s chief premise— “infrastructure available immediately, at exactly the scale needed by the business.”
In short, worldwide spending on cloud services exceeded hardware and software in 2019. The trend accelerated further in 2020, no doubt because of the pandemic. Sarah Wang and Martin Casado estimate that among the top fifty public companies with cloud infrastructure, “an estimated $100B of market value is being lost among them due to cloud impact on margins — relative to running the infrastructure themselves.”
Part of the conversation I have with clients is to ensure they are not seeking a cloud solution from a strictly cost-saving perspective. Instead, discussion on cloud adoption or migration should focus on needs, goals, constraints and consistent access to support resources (technical and otherwise) to ensure success.
The conversation for tech solutions can be framed as a debate between solutions that are “on-premises” or “cloud-based.” Framing is critical to creating a tech solution that works best for your company. Notice the term “tech solution” as opposed to “cloud.” Simply put, the cloud may not always be the best option, depending on what you are seeking to accomplish.
An example – a former client wanted to move a critical business application from on-premises to a cloud environment. Aside from capitalizing on the operational efficiencies and workload scaling cloud can offer, the cost was a huge driver in that they did not want to continue to physically maintain the infrastructure hosting the application.
After more probing, however, my team and I realized that we could not just take the application and move it to the cloud (called re-platforming or “lift and shift”) due its age and lack of compatibility with the new environment. If the application were to move to cloud, it would need to be refactored (or “rip and replace) – the work involved with refactoring can be lengthy and incredibly expensive. The short-term, tangible cost would be immediately felt, but the longer-term, intangible benefits the company would realize would ultimately serve them well.
Whenever cost savings are realized, it’s much further down the line as the company matures and develops new operations or processes.
Tech solutions should always be oriented toward the real problem you’re trying to solve. In seeking the answer to that question, you need to be open to all possibilities, whether cloud or otherwise. Infrastructure and platform services on demand and at scale is enticing. But if the cloud is not going to resolve your fundamental challenges, it may be better to look elsewhere.