Over the past couple of weeks there have been many great discussions about the article posted by a 16Z. the article in summary describes how many organizations could benefit from an analysis of their cloud spend as it relates to their gross revenue.
When I read this article, I immediately thought about the difference in price a consumer pays when buying electric car versus buying a gas one what’s interesting is that the gas car in this analogy is the cloud you continually must gas it up and has a lower purchase price (literal pay as you go). While the electric car fills in for our multi cloud and hybrid cloud options (charge as you go, with simplified ops, solar electrical). In the United States there are incentives to purchase electrical vehicles, but they are still higher initial costs compared to their gas counterparts. we currently own one of each and we’ve noticed that the electrical vehicle is by far the lower cost investment overtime as it cost less to maintain fuel and operate. The key of course is the which workloads do you need to cover?
I really like this approach as it elevates the discussion of investments in technology infrastructure and applications to the business outcomes that they drive. Although in many cases this is dependent on the type of business that is consuming technology a good example might be the difference between a company that provides backup and storage technology and one that manufacturers doors and windows. It’s clear that the technology company focused on storage would have a higher net cost for their technology investments. There have now been at least a dozen articles published and many more podcasts.
As I was looking for a practical way to break down all the data in the A16Z article titled the Cost of cloud a trillion dollar paradox. What’s neat is the way that Kit Colbert approaches the discussion he breaks it into several areas of measurement and behavior. The key emphasis is establishing a model that comprehends both the economics and the skill sets of the organization to operate efficiently and effectively, while setting a baseline of measurements that roll up to the business teams responsible for driving P&L. Full disclosure, I’m part of the marketing team at VMWare where I think about topics like modernization migration an operation for Multi-Cloud outcomes.
Here’s the link to read more: The Cost of Cloud, and the Need for a Multi-Cloud Strategy