Cloud is all, correct? Just as all roads lead to Rome, so all information technology journeys inevitably result in everything being, in some shape or form, “in the cloud.” So we are informed, at least: this journey started back in the mid 2000s, as application service providers (ASPs) gave way to various as-a-service offerings, and Amazon launched its game-changing Elastic Compute Cloud service, EC2.
A decade and a half later, and we’re still on the road – nonetheless, the belief system that we’re en-route to some technologically superior nirvana pervades. Perhaps we will arrive one day at that mythical place where everything just works at ultra scale, and we can all get on with our digitally enabled existences. Perhaps not. We can have that debate, and in parallel, we need to take a cold, hard look at ourselves and our technology strategies.
This aspirational-yet-vague approach to technological transformation is not doing enterprises (large or small) any favors. To put it simply, our dreams are proving expensive. First, let’s consider what is a writ (in large letters) in front of our eyes.
Cloud costs are out of control
For sure, it is possible to spin up a server with a handful of virtual coppers, but this is part of the problem. “Cloud cost complexity is real,” wrote Paula Rooney for CIO.com earlier this year, in five words summarising the challenges with cloud cost management strategies – that it’s too easy to do more and more with the cloud, creating costs without necessarily realizing the benefits.
We know from our FinOps research the breadth of cost management tools and services arriving on the scene to deal with this rapidly emerging challenge to manage cloud cost.
(As an aside, we are informed by vendors, analysts, and pundits alike that the size of the cloud market is growing – but given the runaway train that cloud economics has become, perhaps it shouldn’t be. One to ponder.)
Cloud cost optimization models of many cloud computing services, SaaS, PaaS, and IaaS, are still often based around pay-per-use, which isn’t necessarily compatible with many organizations’ budgeting mechanisms. These models can be attractive for short-term needs but are inevitably more expensive for the longer term. I could caveat this with “unless accompanied by stringent cost control mechanisms,” but evidence across the past 15 years makes this point moot.
One option is to move systems back in-house. As per a discussion I was having with CTO Andi Mann on LinkedIn, this is nothing new; what’s weird is that the journey to the cloud is always presented as one-way, with such events as the exception. Which brings to a second point that we are still wed to the notion that the cloud is a virtual place to which we shall arrive at some point.
Spoiler alert: it isn’t. Instead, technology options will continue to burst forth, new ways of doing things requiring new architectures and approaches. Right now, we’re talking about multi-cloud and hybrid cloud models. But, let’s face it, the world isn’t “moving to multi-cloud” or hybrid cloud: instead, these are consequences of reality.
“Multi-cloud architecture” does not exist in a coherent form; rather, organizations find themselves having taken up cloud services from multiple providers—Amazon Web Services, Microsoft Azure, Google Cloud Platform, and so on—and are living with the consequences.
Similarly, what can we say about hybrid cloud? The term has been applied to either cloud services needing to integrate with legacy applications and data stores; or the use of public cloud services together with on-premise, ‘private’ versions of the same. In either case, it’s a fudge and an expensive one at that.
Why expensive? Because we are, once again, fooling ourselves that the different pieces will “just work” together. At the risk of another spoiler alert, you only have to look at the surge in demand for glue services such as integration platforms as a service (iPaaS). These are not cheap, particularly when used at scale.
Meanwhile, we are still faced with that age-old folly that whatever we are doing now might in some way replace what has gone before. I have had this conversation so many times over the decades that the task is to build something new, then migrate and decommission older systems and applications. I wouldn’t want to put a number on it, but my rule of thumb is that it happens less often than it doesn’t. More to manage, not less, and more to integrate and interface.
Enterprise reality is a long way from cloud nirvana
Reality is, despite cloud spend starting to grow beyond traditional IT spend (see above on maybe it shouldn’t, but anyway), cloud services will live alongside existing IT systems for the foreseeable future, further adding to the hybrid mash.
As I wrote back in 2009, “…choosing cloud services [is] no different from choosing any other kind of service. As a result, you will inevitably continue to have some systems running in-house… the result is inevitably going to be a hybrid architecture, in which new mixes with old, and internal with external.”
It’s still true, with the additional factor of the law of diminishing returns. The hyperscalers have monetized what they can easily, amounting to billions of dollars in terms of IT real estate. But the rest isn’t going to be so simple.
As cloud providers look to harvest more internal applications and run them on their own servers, they move from easier wins to the more challenging territory. The fact that, as of 2022, AWS has a worldwide director of mainframe sales is a significant indicator of where the buck stops, but mainframes are not going to give up their data and applications that easily.
And why should they if the costs of migration increase beyond the benefits of doing so, particularly if other options exist to innovate? One example is captured by the potentially oxymoronic phrase ‘Mainframe DevOps’. For finance organizations, being able to run a CI/CD pipeline within a VM inside a mainframe opens the door to real-time anti-fraud analytics. That sounds like innovation to me.
Adding to all this is the new wave of “Edge”. Local devices, from mobile phones to video cameras and radiology machines, are increasingly intelligent and able to process data. See above on technology options bursting forth, requiring new architectures: cloud providers and telcos are still tussling with how this will look, even as they watch it happen in front of their eyes.
Don’t get me wrong, there’s lots to like about the cloud. But it isn’t the ring to rule them all. Cloud is part of the answer, not the whole answer. But seeing cloud – or cloud-plus – as the core is having a skewing effect on the way we think about it.
The fundamentals of hosted service provision
There are three truths in technology – first, it’s about the abstraction of physical resources; second, it’s about right-sizing the figurative architecture; and third, that it’s about a dynamic market of provisioning. The rest is supply chain management and outsourcing, plus marketing and sales.
The hyperscalers know this, and have done a great job of convincing everyone that the singular vision of cloud is the only show in town. At one point, they were even saying that it was cheaper: AWS’ CEO, in 2015, Andy Jassy, said*: “AWS has such large scale, that we pass on to our customers in the form of lower prices.”
By 2018, AWS was stating, “We never said it was about saving money.” – read into that what you will, but note that many factors are outside the control even of AWS.
“Lower prices” may be true for small hits of variable spending, but it certainly isn’t for major systems or large-scale innovation. Recognizing that pay-per-use couldn’t fly for enterprise spending, AWS, GCP, and Azure have introduced (varyingly named) notions of reserved instances—in which virtual servers can be paid for in advance over a one- or three-year term.
In major part, they’re a recognition that corporate accounting models can’t cope with cloud financing models; also in major part, they’re a rejection of the elasticity principle upon which it was originally sold.
My point is not to rub any provider’s nose in its historical marketing but to return to my opener – that we’re still buying into the notional vision, even as it continues to fragment, and by doing so, the prevarication is costing end-user enterprises money. Certain aspects, painted as different or cheaper, are nothing of the sort – they’re just managed by someone else, and the costs are dictated by what organizations do with what is provided, not its list price.
Shifting the focus from cloud-centricity
So, what to do? We need a view that reflects current reality, not historical rhetoric or a nirvanic future. The present and forward vision of massively distributed, highly abstracted and multi-sourced infrastructure is not what vendor marketing says it is. If you want proof, show me a single picture from a hyperscaler that shows the provider living within some multi-cloud ecosystem.
So, it’s up to us to define it for them. If enterprises can’t do this, they will constantly be pulled off track by those whose answers suit their own goals.
So, what does it look like? In the major part, we already have the answer – a multi-hosted, highly fragmented architecture is, and will remain the norm, even for firms that major on a single cloud provider. But there isn’t currently an easy way to describe it.
I hate to say it, but we’re going to need a new term. I know, I know, industry analysts and their terms, eh? But when Gandalf the Grey became Gandalf the White, it meant something. Labels matter. The current terminology is wrong and driving this skewing effect.
Having played with various ideas, I’m currently majoring on multi-platform architecture – it’s not perfect, I’m happy to change it, but it makes the point.
A journey towards a more optimized, orchestrated multi-platform architecture is a thousand times more achievable and valuable than some figurative journey to the cloud. It embraces and encompasses migration and modernization, core and edge, hybrid and multi-hosting, orchestration and management, security and governance, cost control and innovation.
But it does so seeing the architecture holistically, rather than (say) seeing cloud security as somehow separate to non-cloud security or cloud cost management any different to outsourcing cost optimization.
Of course, we may build things in a cloud-native manner (with containers, Kubernetes and the like), but we can do so without seeing resulting applications as (say, again) needing to run on a hyperscaler, rather than a mainframe. In the multi-platform architecture, all elements being first class citizens even if some are older than others.
That embraces the breadth of the problem space and isn’t skewed towards an “everything will ultimately be cloud,” nor a “cloud is good, the rest is bad,” nor a “cloud is the norm, edge is the exception” line. It also puts paid to any idea of the distorted size of the cloud market. Cloud economics should not exist as a philosophy, or at the very least, it should be one element of FinOps.
There’s still a huge place for the hyperscalers, whose businesses run on three axes – functionality, engineering, and the aforementioned cost. AWS has always sought to out-function the competition, famous for the number of announcements it would make at re:Invent each year (and this year’s data-driven announcements are no exception). Engineering is another definitive metric of strength for a cloud provider, wrapping scalability, performance and robustness into the thought of: is it built right?
And finally, we have the aforementioned cost. There’s also a place for spending on cloud providers, but cost management should be part of the Enterprise IT strategy, not locking the stable door after the rather expensive and hungry stallion has bolted.
Putting multi-platform IT strategy into the driving seat
Which brings to the conclusion – that such a strategy should be built on the notion of a multi-platform architecture, not a figurative cloud. With the former, technology becomes a means to an end, with the business in control. With the latter, organizations are essentially handing the keys to their digital kingdoms to a third party (and help yourself to the contents of the fridge while you are there).
If “every company is a software company,” they need to recognize that software decisions can only be made with a firm grip on infrastructure. This boils down to the most fundamental rule of business – which is to add value to stakeholders. Entire volumes have been written about how leaders need to decide where this value is coming from and dispense with the rest (cf Nike and manufacturing vs branding, and so on and so on).
But this model only works if “the rest” can be delivered cost-effectively. Enterprises do not have a tight grip on their infrastructure providers, a fact that hyperscalers are content to leverage and will continue to do so as long as end-user businesses let them.
Ultimately, I don’t care what term is adopted. But we need to be able to draw a coherent picture that is centred on enterprise needs, not cloud provider capabilities; and it’ll really help everybody if we all agree what it’s called. To stick with current philosophies is helping one set of organizations alone, however, many times they reel out Blockbuster or Kodak as worst-case examples (see also: we’re all still reading books).
Perhaps, we are in the middle of a revolution in service provision. But don’t believe for a minute that providers only offering one part of the answer have either the will or ability to see beyond their own solutions or profit margins. That’s the nature of competition, which is fine. But it means that enterprises need to be more savvy about the models they’re moving towards, as cloud providers aren’t going to do it for them.
To finish on one other analyst trick, yes, we need a paradigm shift. But one which maps onto how things are and will be, with end-user organizations in the driving seat. Otherwise, their destinies will be dictated by others, even as they pick up the check.
*The full quote, from Jassy’s 2015 keynote, is: “There’s 6 reasons that we usually tell people, that we hear most frequently. The first is, if you can turn capital expense to a variable expense, it’s usually very attractive to companies. And then, that variable expense is less than what companies pay on their own – AWS has such large scale, that we pass on to our customers in the form of lower prices.”
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