When it comes to cloud, it doesn’t matter if you’re a fast-growing SaaS startup or an established Enterprise: be intentional and know what is driving your decisions.
We all know that the cloud is the promised land — a place of milk and honey, right? The place that that so many a CIO has crooned about in lyrics and song:
“You never have to clean your room or put your toys away
There's a little white horse you can ride of course
You can jump so high you can touch the sky…”
Okay, actually that song was written by a hobo who was dreaming about a different kind of paradise. But, the fact is that cloud has its benefits and its trade-offs, just like any other choice in life. And those choices have consequences.
Death, Taxes, and … Higher Cloud Bills?
Not always! Just read this fantastic post by Calvin French-Owen about how Segment—one of the smartest and most capable engineering organizations in the Valley—reduced their AWS bill by millions of dollars per year by cutting infrastructure costs.
It’s great to save money, of course, but with just 90 days of work Segment was able to do something incredible: they increased their gross margin by 20%. Gulp. As more businesses are built on a value chain that includes software as a service (e.g. delivered on hosted infrastructure), it’s no wonder that a more nuanced and sustainable approach to infrastructure is emerging and that hybrid cloud adoption is gaining traction.
This is especially true within the larger Enterprise ecosystem, which is sensitive to business drivers like gross margin in a way that startups often are not. Buzzwords aside, hybrid cloud is a hot topic for the simple reason that it embraces the complexity of the equation.
My Touchstones: Introducing the Five P’s
I don’t need to tell you that strategies at scale are complex. Nuanced. Complicated. This is even more of a critical concern for large Enteprises — which may not or may not have the flexibility or internal capabilities of Segment. In my view, a desire for both flexibility and control combined with rapid changes in technology and business needs is driving the conversation around more diverse cloud architectures. Ah, those multi-clouds, where you can jump so high you can touch the sky … !
I’ve been in the cloud business since 2001, back when we called it hosting. After working closely with hundreds of companies ever since, from startups to Fortune 100’s, I’ve found that having a lens through which to better see your cloud journey is super helpful.
I boil it down to what I call (and I’m sure others do as well) The Five P’s:
- Price - Though the cloud spend among Enterprise businesses is significant and growing, for the third year in a row in the 2019 State of the Cloud Survey, they report that managing (and optimizing!) costs is the #1 priority.
- Performance - According to this same survey, 84% of companies state that performance is key benefits driving a multicloud strategy. Funny enough, it’s usually directly related to Price!
- Proximity - Within five years, something like 75% of Enterprise-generated data will be processed outside of traditional datacenters and clouds. Many factors—ranging from latency to regulatory demands—can, and will, continue to drive this particular P.
- Pride - As with most decisions (strategic or otherwise) hindsight is always 20/20. However, people invest an enormous amount into their work, and companies can do the same, often with good reason. The Wikipedia article for “Not Invented Here” does the concept more justice than I can!
- Politics - Whether they are internal or external, politics are a real factor. Just last week, the Pentagon awarded the $10B JEDI contract to … er … not Amazon. Of course, we’re all familiar with the more garden-variety inter-office type:
How Can You Leverage the Five P’s?
Each business is unique, and that’s why singular approaches don’t ring true to me. Starting a conversation with overly simplistic terms (e.g. “Kubernetes is the future,” or “everything is going to the cloud”) is a clear bellwether that we’re not yet digging into the really big or really interesting problems.
Sometimes the answer is actually simple: focus on the “P” that matters most to you, and design around it. Just ask Segment, right? But especially in the Enteprise, understanding how the various P’s factor into your strategy will result in a more robust plan that can survive, and even thrive, over time — even in a changing environment.
To help avoid the sheen of mystery that can bog down technology conversations, I prefer to use a planning pulse that accounts for short-term (e.g. 90 day), mid-term (1 year) and long term (5 year) horizons. Use the Five P’s to gauge sensitivity and direction around the factors that influence your strategy, and in general gut check, that your broader team and leadership are on the same page.