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  • Writer's pictureShaw Innes

The Growth Trajectory of Cloud what is it really costing you?

The growth trajectory of Cloud has been well documented, you’d be pretty hard pressed not to be able to find a reference to the increase in adoption worldwide. Pretty much every IT vendor is vying for a place in the race to cloud adoption. We are at a unique inflection point with a mass of opportunity ahead of us as providers, vendors, sellers and enablers of IT, as consumers continue to drive us toward innovation, as we continue to strive for faster, more efficient, more effective, cheaper ways to do, well, everything! The opportunity that the cloud presents to enable, scale and efficiencies that have been previously unavailable to many is disrupting the fabric of the way we have done business to date and literally opening up a world of opportunities.

To steal a phrase from the recent Cisco report Impact of Cloud IT Consumption models “One of the clearest expressions of this cloud-driven change is the emergence of lines of business (LOBs) — human resources, sales, R&D, and other areas that are end users of IT — both as direct consumers of cloud-based services, and as ever more prominent influencers of companies’ IT agendas. IT as it were, is no longer the domain of the IT department, it has permeated the entire organisation and is becoming an increasing challenge for those responsible for budgets and finance to truly understand the cost of the Cloud.

Your cloud, your way is very real in the current world of private, hybrid and public cloud offerings and pretty much every software product you purchase today can be consumed across all three however there is an ever increasing push to fully managed software as a service (SaaS) products and services and the global SaaS market is projected to grow from $49B in 2015 to $67B in 2018. Source: Technology Business Research presentation The Developer’s Coup: 2015 Applications Development Demands and Vendor Opportunities.

“Cloud computing continues to grow at rates much higher than IT spending generally,” Gartner research director, Ed Anderson, said. “Growth in Cloud services is being driven by new IT computing scenarios being deployed using Cloud models, as well as the migration of traditional IT services to Cloud service alternatives.”

While the move to the cloud has a myriad of considerations there is one that I liken to the early days of the mysterious internet charges and data download charges (although some would argue they still don’t understand these). Do we really know the true usage costs of cloud?

I run a professional services company called SixPivot and product company, Cloud Ctrl and our customers consistently ask the following:

  1. We are about to start our cloud journey and I’ve looked at the efficiencies cloud will provide us, but I have not thought about the true and increasing nature of cloud consumption.

  2. How do I know which public cloud provider is best for me and will truly offer best pricing on consumption?

  3. We are looking for SaaS solutions but we understand that there will be a cost for the cloud usage of those solutions but few software companies can articulate those costs to me.

Independent Software Vendors who have adopted Cloud Ctrl say:

  1. As a SaaS provider I really don’t know what I should be charging my customers, I am unsure how much consumption my product or service will use

  2. We are working on a number of projects that will be enable IOT for our customers but we are unable to model what the consumption data will look like

  3. There is an emergence of an entirely new class of business models based on smart machine technologies, advanced analytics and big data run in the cloud as a business we need to provide our solutions on these pillars but at what cost?

In the Cisco report “Impact of Cloud IT Consumption Models” note this report was written in 2013 and surveyed 4,226 IT leaders, across 18 industries and 9 key economies and yet the highlights, concerns and forecasts are still as relevant three years later in 2016 and for the most part business is still grappling to address these concerns

The below is taken straight from the report and still today represent two of the most common issues we see with our customers and why our customers are choosing Cloud Ctrl.

Cloud Cost Challenges Increase, but Optimization Efforts Lag

26 percent of respondents identify cloud cost management as a significant challenge in 2016, a steady increase each year from 18 percent in 2013.

Improving cloud cost management provides a significant opportunity for savings, since few companies are taking critical actions to optimize cloud costs, such as shutting down unused workloads or selecting lower-cost cloud or regions. The most common optimization action is monitoring utilization and rightsizing instances (45 percent of enterprises and SMBs). 36 percent of SMBs are purchasing AWS Reserved Instances (RIs) to save money, but only 21 percent are tracking purchased RIs to make sure that they are being fully utilized. When purchased RIs are not fully used, the savings decline, and the RI can even end up costing more than on-demand instances.

DevOps Grows and Docker Spreads Like Wildfire, Especially in the Enterprise

The twin trends of DevOps and cloud adoption are closely linked. As companies seek to drive digital business by delivering new software applications and features more quickly, they look to both DevOps and cloud as key enablers. DevOps is now being adopted by 74 percent of organizations, up from 66 percent in 2015.

As part of adopting DevOps processes, many companies choose to implement configuration management tools that allow them to standardize and automate deployment and configuration of servers and applications. In the last two years, companies have also begun to embrace container technologies, such as Docker, to help them standardize and streamline the way they package and deploy code.

Docker has shown phenomenal growth year-over-year, with more than double the number of respondents using it (from 13 to 27 percent). Ansible also doubled (10 to 20 percent), Puppet showed strong growth (24 to 32 percent), and Chef grew as well (28 to 32 percent).

Through the work we do in our consulting business to lift and shift customer products to the cloud not only as an IaaS solution but as a PaaS, SixPivot built Cloud Ctrl as an enabler product for our customers based on the ongoing challenges in understanding the true cost of cloud solutions.

About the Author

Faith Rees is the co-founder and CEO of SixPivot. Faith has worked in the Australian IT industry for the past 18 years across a variety of roles from sales and marketing to general management, director and chief operating officer roles including holding board director roles. Much of her last 10 years in the industry has been involved in software development and vendor management. Faith is a strong believer in giving back to the ICT community through, through her role as an advocate for the IT industry, Faith also serves on a number of government and industry committees. Faith is an advocate for diversity and in particular supporting women in their careers, she is a member of Women on Boards, is a mentor for the WiT Board Readiness Program and is on the Advisory Committee for Diverse City Careers (DCC).





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