The Cloud - complex, costly and necessary?
This is the second of three blogs taking a detailed look at the cloud and the formidable years the sector has experienced recently.
In this blog we explore the boom it's had since the pandemic, the state of the cloud sector now, and the future cloud decisions that need to be made.
In March 2020, Gartner.com produced a report on how to manage and optimise costs of public cloud IaaS and PaaS providers. Aptum, a cloud services provider, collated the key findings:
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Multifaceted pricing makes it difficult to know which is the best pricing scenario for individual use cases
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“Extreme granularity” makes it difficult to enable chargeback
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Resource sprawl leads to unnecessary charges
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Constant change in cloud offerings makes it difficult to predict how new services or features will impact costs
Reading this, it would be a fair assessment to conclude that the cloud is an extremely complex and costly investment, one worth careful consideration. And you’d be right.
However, also in March 2020 the Covid-19 pandemic forced global lockdowns.
The world looked to tech to solve connectivity, availability and scalability issues, and cloud computing was the answer.
Office workers needing to work from home with immediate effect meant companies had far less time to weigh up cost decisions and just had to go for it.
“The industry was estimated at just
$24.65 billion in 2010, and by 2023
it had already surpassed the $150
billion mark.” - Techjury.net
Flexera, a Chicago based software company describes that “Cloud adoption was already expanding for several years and was accelerated by the pandemic.”
But it wasn't just large scale enterprises who adopted the cloud as research conducted by Flexera shows. In 2022, they found that “over 30% of small and medium sized businesses used significantly more cloud computing than originally planned due to the pandemic and 52% said it was slightly higher than expected.
In 2023, with the impacts of the pandemic on the tech world levelling out, Techjury, a technology review site, revealed some interesting Cloud computing statistics.
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81% of all enterprises have a multi-cloud strategy already laid out or in the works.
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67% of enterprise infrastructure is cloud-based.
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82% of the workload will reside on the cloud.
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As a result, more than 40 zettabytes of data will be flowing through cloud servers and networks. And it makes sense, as even today the average person uses 36 cloud-based services every single day.
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Amazon Web Services has the largest cloud computing market share at 32%.
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Platform as a Service (PaaS) will experience a 19.6% Compound Annual Growth Rate (CAGR) by 2026.
Everything in tech goes at a pace comparable to nothing else. But even the most avid cloud champion would not have been able to dream up those kinds of figures.
“…the tech world is figuring
out how best to use the cloud.”
And according to Techjury, the industry was estimated at just $24.65 billion in 2010, and by 2023 it had already surpassed the $150 billion mark.
We’ve had the boom, should we expect a bust?
David Heinemeier Hansson, the creator of Ruby on Rails, co-founder of Basecamp & HEY wrote a blog in October 2022 on why Basecamp and HEY were leaving the cloud. He describes how they’ve concluded “renting computers is (mostly) a bad deal for medium-sized companies like ours with stable growth. The savings promised in reduced complexity never materialised. So we’re making our plans to leave.”
He goes on to discuss how running major services such as HEY and Basecamp is not simple purely because it’s on the cloud and there are cheaper ways of doing it now they are at scale.
Hansson also comments on the boom this has been for cloud providers as “Amazon in particular is printing profits renting out servers at obscene margins. [The] AWS' profit margin is almost 30% ($18.5B in profits on $62.2B in revenue)”.
He reveals that HEY alone spends over half a million dollars per year for database (RDS) and search (ES) services from Amazon.”
With trailblazers such as Hansson speaking out on the unnecessary costs, the impacts of the pandemic levelling off, and the costly lessons learnt by businesses throughout the pandemic being applied, the tech world is figuring out how best to use the cloud.
This requires experts.
As discussed in our previous article ‘Exploring the Cloud’, midway through 2020 there was an enormous spike in contract and permanent Cloud Architect job postings.
With contract requirements staying way above permanent requirements up until 2023 where the trend is a higher requirement for permanent Cloud Architects.
This points to businesses embarking on the challenge of establishing exactly which of the complex and costly cloud solutions offered are entirely necessary, and how best to use them for their individual business needs.
Cloud isn’t heading for a bust, but a boom in cloud knowledge is on the horizon.
