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Interpreting Cloud Economics for the Digital-First Enterprise

“You have to look at not just the cloud economics but the reality of the people”. These technology leaders discussed cloud economics and the digital-first enterprise.

Cloud economics studies cloud computing and calculates the value this technology can bring to an organisation. Because of some stunning examples of resilience displayed by cloud-adopters during the pandemic in 2020 and 2021, the rhetoric of cloud being necessary for the modern business provided case study material and evidence in support of this. Cloud supports remote work, customer or client experiences, digital collaboration and more. Yet the cost-benefit analysis of cloud is still much debated in boardrooms; technology leaders are front and centre in advocating for the digital-first enterprise, which will, in some way, include cloud-based technology. 

In this roundtable debate, the panellists explored their investments into the cloud and communicated the value of cloud to the team.

With Mark Chillingworth moderating this roundtable debate, the speakers include: 

Cloud investment challenges

Moderator Mark Chillingworth began the debate by asking the speakers how they ensured their investment into the cloud was right.

“It’s actually a really difficult decision, deciding first of all to go on the cloud”, said Kshitij Kumar. Currently the CDO at OneFootball, KK also stated that it is difficult to decide which cloud to go on. He gave an example of his time at a company a few years back. “We actually started out on google and we realised when we went into certain countries that it wouldn’t work there”, he said. Due to this issue, they had to use other cloud services. KK mentioned that in another company, they ended up having issues on AWS. 

To avoid these problems in the future, he argued that you need to look at it from a compliance and capabilities perspective. KK concluded that “going to the cloud is a no-brainer”. He pointed out that technology leaders need to be “methodical” and plan it out before migrating there.

When asked how she mapped out the investment, Christina responded by saying that OVO was cloud-native from the start. CPTO at OVO Energy, Christina Scott explained that the company bought SSA retail, which was classed as “legacy technology”. She stated: “We’re going through the process of trying to move on from modern technology multi-cloud solutions”. With all cloud solutions currently embedded in the company, Christina argued that now, it’s just a matter of simplifying and rationalising it for next year. 

“So the economic debate is about understanding which cloud is right?” Mark asked. Agreeing with this statement, Christina highlighted that they have different teams who have different cloud solutions and skills. “You have to look at not just the cloud economics but the reality of the people”, she said.

Cloud economics – easing the journey

“We work with a lot of large organisations and helping them on the journey to cloud”, said CGO & Head of EMEA at HCL Technologies, Ashish Gupta. He has seen a variety of common occurrences in all cloud journeys. This includes a reaction to shadow IT and the Board putting pressure on CIOs to go onto the cloud or become digital. Ashish explained that when it comes to the cloud, he has seen people make the mistake of promising on the economic business case. 

He explained that people in the technology function under-appreciate what benefits the cloud brings to the organisation. When migrating to the cloud, Ashish wants technologists to consider three main vectors. “It’s a completely different technology underpinning capability, it’s a different economic capability and it’s a different consumption capability”, he said. 

In addition to this, he believes there are further opitmisations that need to be carried out before starting a cloud journey. Ashish pointed out that once you’re in the cloud, the bills begin to get “racked up”. He stated: “What we tell all our customers is that you have to be a lot more deliberate in your operating model in terms of cloud economies in terms of the costs which underpin your cloud”. Once this is achieved in an organisation’s capability, he believes that they can control it more easily.

Finance and technology 

Delving into the finance perspective, Des Field Corbett – CIO of Allianz Direct – discussed the importance of maintaining costs. “If your cloud transformation is just lifting and shifting the structure of the cloud you may get some cost savings”, he said. On the other hand, Des argued that this wouldn’t allow you to take full advantage of all the cloud’s capabilities. He explained that when Allianz Direct was built, they “wanted to empower small teams to do things”. This includes developing software and understanding the finance and cost of running that software. 

“We’ve built FinOps into our pipeline”, Des explained. This means that the organisation’s engineers can allocate a resource for any particular service and be able to monitor that. Des wouldn’t be able to monitor the cost and follow up on what his 300 engineers are doing with ease. However, by allowing his engineers to take that responsibility, they can save that money where needed. “It’s much easier and more efficient if they do it”, he argued.

In his experience, AECOM’s Data Science Director Andreas Galatoulas has had a variety of experiences with the finance department. When starting a cloud solution, he agreed with another speaker’s previous point of technologists using their own credit card. “Otherwise it’s never going to happen”, he said. Andreas stated that what he usually does is move finance into the cloud. He takes the process they have on their excel spreadsheets and migrates that onto a cloud dashboard. He explained that the more data they uploaded onto the dashboard, it became slower. “They are part of the journey and get our frustration,” he said. 

This roundtable was recorded at The Studio and made in partnership with HCLTech. To find out more about The Studio, click here.