Cloud Economics
Over this last year, one topic for me has risen above many others: Cloud Economics.
The terminology “Cloud” is utilized as all-encompassing for the underlying infrastructure that we are doing the analysis on and comparing. This includes but is not limited to on-premises, private hosting providers, colocation, public cloud, and SaaS solutions. I’ve standardized this for my edification because we are providing private clouds to our consumers, and they rarely care or know about where the systems are running.
Isn’t this just FinOps?
FinOps is a specific discipline within Cloud Economics that focuses on the day-to-day financial operations of managing public cloud resources. Generally, C-level executives, finance teams, and IT leadership are looking at Cloud Economic principles. In contrast, FinOps often does include some of these individuals but generally lives closer to the operational team members.
So, what is Cloud Economics?
Cloud Economics encompasses the financial and cost-related aspects of adopting and managing services. It focuses on the following key aspects:
Cost Efficiency
Costing models
TCO(Total Cost of Ownership)
Cost optimization
Elasticity and Scalability
Investment Trade-offs
Vendor Lock-in
Cost Visibility and Control
Value beyond Cost Savings
Compliance and Security
I believe this list is incomplete as I’m discovering more and more.
It’s been a growing trend in the industry where I’m seeing more and more the need for services around this type of analysis.
Where I’ve gotten to today with this topic so far has been around the analysis of the TCO. I’ve been able to come up with a tool I’m using to help perform this analysis, and it’s been interesting to see where the costs come from, but very complex to accommodate pricing models for the various solutions.
I’m curious how many of you compare the various hosting models when you are considering a system refresh or have been given a directive by someone in your organization who might not have a total understanding of the complexities of running a production environment.
Along my journey in this career, I have had several times where I was told to do things that I knew were being made because it was the latest trend. Moving our infrastructure to the public cloud was one of those, and while hesitant, it came down to education and the art of producing artifacts with numbers quantifying our decisions. This art has helped me tremendously in assisting organizations to mature with the ones I’ve worked for or consulted.
In some cases, I found that it was better for us to operate in the public cloud, others in the private cloud, and let’s be honest, on-premises will have a place for the foreseeable future until we see some other shifts happen in architectures and pricing models.
In an upcoming series, we will dive into how we approach Cloud Economics, but my question to y’all is, how are you doing your analysis? What am I missing in my Cloud Economic key aspects?
Cloud Economics - TCO - Pt 1 - Environments
Cloud Economics - TCO - Pt 2 - On-Premises/Colocations
Cloud Economics - TCO - Pt 3 - Public Cloud
Cloud Economics - TCO - Pt 4 - Private Cloud Provider
Cloud Economics - TCO - Pt 5 - Staffing/Professional Services