An interesting perspective posted at CIO Dive about the fundamentally (or seemingly) accepted belief in cloud as a de-facto cost saver, whereas the author suggests that this is surely not the case if careful management is not employed. We have released member research on the benefits of cloud in corporate banking and for sure one of those should be a reduction in capex. However, without some discipline (and perhaps a real plan), this premise may indeed end up as a slippery slope down the wrong side of the mountain.
‘In the modern technology era, companies are — overwhelmingly — spending too much on cloud…
More than eight in 10 enterprises see spend management as a top cloud-related challenge, according to Flexera’s 2022 State of the Cloud report…
“The cloud makes it ridiculously easy to spend money,” said Brian Adler, senior director of cloud market strategy at Flexera. This problem is an upgraded, cloud version of shadow IT: If enterprises don’t have a handle on what they have, and what they’re paying for, they’re going to spend on cloud they don’t really need…
It happens to everyone, Adler added. “It’s Day One for everybody in the cloud at some point,” he said.’
The author is certainly not discouraging the move to all the value-adds that are available through cloud technology uses (i.e.; creativity) but recommends things like guardrails and taking advantage of available discounts. There is no particular breakdown of vertical segments, so we expect this is a generally applied message, but our constituency should pay some attention. Worth a quick read as a reminder to control spending.
‘“Seven years ago, nobody knew what a container was, and now we’re trying to do containers,” said Baker. “It will cost less to innovate than it does to waste money.”…
But instead of wasting money in the name of creativity, enterprises can adopt cost-management tools alongside innovation…
Rethinking cloud as a big money saver is a necessary step in this evolution too, Woo adds. “Everyone thinks that cloud usage was supposed to save you money. It’s not going to save you money. It’s going to provide you with unlimited access to capabilities you wouldn’t be able to get otherwise.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group