The turbulent financial market is forcing companies to increase the scrutiny of their budgets. Rather than simply allowing hype to dictate their spending, firms are starting to see whether their initiatives are generating enough value. One of the areas that could be on the chopping block is public cloud, according to Joel Berwitz – Managing Consultant at technology transformation company CNNECT.
Cloud computing has become a staple in modern business. In fact, a report from Colorlib claimed that 94% of companies worldwide are using cloud computing in 2023, up by 14% from 2020. With so many companies adopting the technology, it’s unsurprising that many are seeking to maximize its use.
Berwitz has seen an increase in companies looking to build a FinOps practice so that all stakeholders are engaged in public cloud consumption, costs and processes. FinOps is a business unit that aims to bring greater financial accountability to the use of cloud solutions. The goal is to optimise cloud usage without overspending and wasting resources.
After reviewing their cloud operations, some firms are considering transitioning away from public cloud in favour of alternative solutions. “We’re also seeing an element of cloud repatriation, customers are evaluating what workloads they put into the cloud and if they’re not innovating the systems then bring it back on premise,” he added. “We think a big part of this is down to budgeting, where in the past they may have turned a blind eye to the costs, they are now under the spotlight as the economic situation changes.”
It is likely that most organisations are exploring whether they utilise public cloud, private cloud or remain on-premise, Berwitz said. It is not an easy decision to make and largely depends on a firm’s existing infrastructure. Some firms will not simply be able to repatriate to other systems, and there are certain advantages of the cloud that cannot be replicated internally.
Another aspect that needs to be considered is the long-term adaptability. Berwitz explained that if a business model is fairly linear and rarely changes, then an on-premise infrastructure makes sense. However, if a firm is consistently changing to meet customer demands or evolve its operations in dramatic ways, the cloud is going to be much more beneficial. He added, “Some customers are also evaluating cloud alongside their business model and culture. If business is fairly predictable and does not fluctuate then it makes sense to be on-premise. Whereas, some organisations use the elasticity to benefit their business, whether that may be from acquisitions and mergers or simply due to their business demand changing frequently.”
Misconceptions and challenges of the public cloud
As firms increase the scrutiny of their cloud usage, it is important to remove any misconceptions firms have. Berwitz said, “Often, it has been said that it’s cheaper to run in the cloud but we find out that in the majority of cases that may not be the reality. Lifting and shifting virtual servers may not be the most efficient use, however re-factoring applications may be too difficult. I think that’s why these days there is a happy medium in hybrid cloud.” To correctly implement the hybrid approach, firms will need to know which services and applications they need to keep on-premise, which can go on the cloud and which can be SaaS.
As with many in-demand technologies, there is a need for highly skilled workers and as a result, retaining staff is a tricky task. Berwitz stated that he has seen many organisations invest in their staff to support their move to the cloud only for a BigTech firm to swoop in and hire them. “These skills are in demand and it is hard to retain once the business becomes more operational.” BigTech firms can offer high salaries and perks to incentivise a move, so organisations will need to find ways to keep their staff happy.
Another challenge firms are facing with the cloud is simply making the most of the technology. Services available in the public cloud are constantly being updated and new solutions added. If an organisation doesn’t want the fear of missing out, Berwitz urges them to work with an external agency. They are much more in-tune with the offerings of the public cloud as they are helping multiple organisations interact with the public cloud and will be much more capable of keeping-up-to-date with services than an internal team.
Finally, Berwitz added, “In order to maximise the use of cloud, you need to be prepared to take risks and architect the solution in a more granular manner, but also with costs in mind. If you’re risk-averse and do not want to challenge the status quo, then it will be difficult to get the most of public cloud.”
Getting the most out of the public cloud
One of the biggest problems Berwitz notes about the use of the cloud is the lack of optimisation. This is forcing many firms to not get most of the technology and effectively waste resources that could easily be put to better use.
The question of cloud optimisation is a regular question posed to CNNECT. Unfortunately, it is not just a simple answer, it all depends on the scenario. There are engineering and financial instrument factors to consider, but most importantly, it is down to the people and processes within the organisation.
He explained, “The FinOps Foundation states three phases – Crawl, Walk and Run, and in each there are a series of ways to optimise cloud usage. The key is identifying where your organisation sits and making sure you have the guidance to make the right changes. We often see organisations spending time on tooling to provide the reports to right size the infrastructure first. This is often costly and time consuming as it relies on people to make change. We flip this around and focus on gaining the best financial outcome to then allow reinvestment into tooling based on the initial savings.”
It is impossible to escape the hype around AI, which consistently dominates innovation discussions. AI is a transformative piece of technology, and it can even help with cloud optimisation. It can be used to enhance the work of FinOps teams by optimising performance based on historical data and predictions of future requirements, he explained. One particular use case that Berwitz has seen have substantial success is to use AI to autonomously react to changes in usage of AWS (Amazon Web Services) on a minute-by-minute basis. This allows a company to match their financial savings instruments to exactly what they are utilising, rather than over or under compensating. “This tool is plug-and-play and saves money from the start,” he added.
One final note from Berwitz on the use of public clouds is that firms shouldn’t just see them as a place to store infrastructure offsite – they boast agility and innovative properties. To leverage these, firms need to embrace cloud native applications and leverage services for analytics, machine learning and AI to enhance their insights and generate value. They will also need to invest into the team, creating a team of new and existing members, by continuously cross-training and upskilling. Through this, firms can start to optimise their cloud usage.
How does CNNECT help?
CNNECT helps companies adopt technology to drive greater efficiency and productivity. Rather than having a customer and provider relationship, CNNECT sees the relationship more like a partnership. Its website proudly states that, “We’re a part of your team.” By working together, CNNECT supplies clients with leadership, strategy and expertise to identify, execute, and implement technology transformation projects faster and with better outcomes. Through CNNECT companies can get guidance on implementing cloud technology, cybersecurity, AI, collaboration technologies and more.
Focusing on its efforts with the cloud, CNNECT helps firms prepare for using the cloud and then optimise their usage of it. For example, CNNECT will help a client go through a cloud assessment that helps them understand what they need to do to become cloud-ready, build a transformation roadmap, build a migration plan and more. On top of this, CNNECT offers cloud adoption frameworks, cloud security assessments, cloud migration support and cloud cost optimisation.
Berwitz added, “We help organisations by providing services such as Cloud Cost Assessments, outlining a baseline for where we can help them to improve. We can then help with the design, migration and build of services alongside supporting the process of implementing best practice FinOps approaches to support cloud growth.”
One of the biggest boons of CNNECT’s support is its cost optimisation. With budget constraints getting tighter, firms need to ensure they are making the most out of their cloud and not wasting resources. Regardless of a firm’s FinOps maturity, CNNECT helps teams understand where automated algorithms could improve savings potential. It states that the goal is to eliminate waste, establish internal FinOps capability and drive you towards self-service with the right mix of tools to deliver optimisation.
Often customers are looking too far ahead with their cloud operations and focusing on the big, complex tasks, Berwitz explained. CNNECT often starts its optimisation efforts by looking at the quick wins that can have immediate savings and can help fund the required people/tools needed to build a more enhanced FinOps practice in the future. By saving from the start, you can help the process kick off, he said.
“Our current customers would probably say they have been able to save on their cloud spend in a very short time frame and with little impact,” Berwitz added. “Our Cloud Cost Assessment is frictionless and provides an overview of immediate savings with no more than an hour spent on implementation. We then encourage spending via cloud marketplaces, which further adds to the customer’s spend commitments. Any savings made are reinvested into further cost optimisation tooling or security.”
CNNECT is not just a one-trick pony. The company will help a firm with everything it needs to get the most out of the cloud. This is important as having that single source of advice and guidance can make everything a lot simpler than having competing opinions muddying the water. A lot of the challenges that arise from cloud spend optimisation and cloud security are stem from misaligned design processes that had multiple stakeholders involved, Berwitz explained.
“Cloud is usually driven from an infrastructure or product owner, and the security team is left as a final consideration. This often means the security team are not on the same journey thus resulting in the same security practices as on-premise. We like to rethink this approach and use cloud native tooling to provide visibility across the entire cloud environment.”