Blinded by the Price!

With the war on price per RU being waged by the big three cloud providers, the perception grew that the public cloud was about cost savings. Now, although replacing your outsourced or self-managed IT infrastructure with public cloud services might (!) save you money, there is no promise or guarantee out there that it will. It can be, but certainly doesn’t have to. First, there is more to cloud than just (presumably) cheap capacity, and second: if you let yourself be guided by short-term cost cuts rather than long-term competitive advantage, then you’ve not understood AWS, Google and Azure at all. Go back and start again – by reading this article.

Cloud = Cheaper Compute, Network and Storage?

Many times I have seen the term of cloud being used to describe bare computing and storage capacity plus the associated network infrastructure. This happens if you speak to traditional outsourcing companies or hardware vendors about IT infrastructure – and with their client base. Let’s be clear – if you compare your own “bare” infrastructure with a real public cloud, the idiom of apples and oranges is not strong enough to describe how far off you are.

In the very centre of every public cloud, there lies Infrastructure as a Service underneath. And over the last years, this has become just the foundation and the distribution framework for the actual magic and value in public cloud. Just take a look at the huge potential value and competitive advantage that sits in the AWS, Azure or Google services. Look at their DBMS, Big Data & Analytics, IoT, … whatever service line you pick. This is where outsourcing stops, and competitive advantage begins. Look beyond the capacity, look for value and for use cases. It’s the sheer portfolio of services (growing steadily) that amaze me when working on public Cloud services day in and out in job – and not saving someone’s budget.

Automation = Cost Savings!

Now, although I do insist on not limiting cloud to cost saving potential only – I do not argue there is such potential. However, if you keep your cloud infrastructure running at steady scale and with traditional support and management models around it, without any operational smart idea applied, the cost benefit over having an outsourced private platform isn’t that big after all. To get the most out of the IaaS side of a public cloud, it takes automation, not just a managed service.

If well architected and set up, your applications and their performance on a public cloud will strive, whilst the cost will decrease dramatically. Imagine patching and operations are largely done by executed scripts and code, not humans anymore. By applying a set of rules, policies and thresholds to run your platforms and keep them secure and patched it does not take a team of smart and senior guys all the time, it just takes good automation. That way, you ensure maximum benefit of the capacity you pay for – at the lowest possible cost.

Time to Value above ROI

Lastly, one business term that I surprisingly came across was the question about the Return of Investment if a company were to move to the public cloud. This is somewhat wrong. It should not be about the ROI, that applies the wrong metrics to the success of a cloud adoption.  Actually, the Time to Value weighs more than the ROI, as the ROI is immediate – there are no investments that do not return with public cloud services. You get what you pay for hour by hour. The only investment, commercially speaking, is the initial migration and automation onetime effort. What counts is how long it takes you to get real value out of using the public cloud broadly across your IT service demand. Adopt a broader thinking about cloud services. It’s more than just server and operating system. And it’s the value, not just the price, that should guide you.