Not seeing the savings promised by a move to the cloud?

Luke Matthews Head of Cloud & Infrastructure Linkedin Profile
Not seeing the savings promised by a move to the cloud?

You wouldn’t be alone. Here’s why many think it. And how to fix it.

A 2023 ADAPT CFO Edge Survey found that of the top 10 gripes about cloud investment, eight were linked to cost, while a PWC survey 1 reported 53% of companies were “yet to reap substantial value from their cloud investments”.

And yet spending on public cloud services continues to rise unabated, with end-user spend forecast to top $679B in 2024 and exceed $1T in 2027 2.

Luke Matthews, Brennan’s Head of Cloud and Infrastructure, unpicks the tension between investment and sentiment, and explores how organisations can overcome cost concerns.

Luke, why do you think so many organisations report frustrations with their cloud investments?

Everyone wants to optimise their budgets. That’s a given. Add to that the economic headwinds we’re all feeling – including cloud providers lifting their pricing across the board in 2023 – and the fact cloud solutions are complex, it’s no surprise that some organisations feel latent discontent with notion the cloud isn’t delivering on value.

When it’s economically challenging, it creates uncertainty. Tough questions start being asked. Are we at the ceiling of our cloud budget? Are we trapped managing legacy infrastructure on-cloud? How do we rearchitect without triggering new projects?

It may have been that business’ already had plans in place to address those issues. Now, they’re factoring in 10% more spend. It’s does add pressure in uncomfortable ways. That uncertainty – especially about ongoing costs – isn’t always factored in beyond what we consider to be the easy part of a cloud journey: that initial lift-and-shift.

 Cloud adoption isn’t about reaching a fixed endpoint. It’s a continuum. If you’re not actively optimising, reviewing spend, or asking how you can do better, it’s likely you’re missing out. 

Why do you think there was such a strong emphasis on cost savings with cloud solutions?

Savings are always a motivator and, in many cases, hold primacy over strategy. But you really want to start by unpicking the business motivations. Questions like, “Why are we doing this?” and “How will we measure success?” are fundamental. Often the initial planning component hasn’t really been done at a granular level. It means you’re not able to fully quantify the benefits back to the business, post-migration.

Cloud adoption isn’t about reaching a fixed endpoint. It’s a continuum. If you’re not actively optimising, reviewing spend, or asking how you can do better, it’s likely you’re missing out. But tensions can emerge there. Customers have to have an appetite for a cloud maturity journey for it to succeed, but that often runs contrary for the understandable desire to see quick wins.

What are some of the things an organisation might do to reframe the conversation?

To my mind, there are three things worth focusing on.

The first is to consider running a comprehensive cloud optimisation health check – one that covers costs, security, and governance. It provides assurance that their bills are right, and their security is on-point. If they aren’t, we’ll quickly spot those gaps, and show how and where we can improve them. More often than not, a health check can save the customer immediately – often more than 30% of their Azure bill. I consider those to be powerful numbers.

Second, is there a recurring element? Health checks will resolve ‘point-in-time’ problems. Of even greater benefit is to initiate plans that proactively manage ongoing issues. That could be using a trusted secure cloud managed service partner to proactively look at security, cost, and governance. It might be new technology advances – and AI is a prime example of this – that improve your environment. It might be filling a skills gap, either by hiring internally or calling in outside support. Or it could be a mix of all those elements.

 More often than not, a health check can save the customer immediately, often more than 30% of their Azure bill. I consider those to be powerful numbers. 

And the third is, if you do have legacy infrastructure you can’t decommission, have you considered a hybrid approach? We find a hybrid approach – one that really considers the life of your infrastructure – generally gives better outcomes. With Brennan, we can manage what’s static and stable, and give a fixed cost on that. It’s an approach that can build resilience against price elasticity with cloud providers to contain those shocks.

Can you talk about organisations doing it well?

We’ve had several clients who, having used other providers to deploy extensions to their cloud networking, weren’t sure what was deployed, was secure, or even necessary when looking at their monthly invoice. An Azure Health Check Service found a number of changes to improve their cloud security posture, and the customer was armed with a report highlighting the changes made and benefits therein.

In one case, where we were able to deploy the Brennan Virtual Cloud Engineer service, on day one – literally the first day of service activation – we were able to make a change that saved them $11,000 a year.

Additional flow-on benefits continue accruing, too. Recurring security services is one. And because you can see how it’s working, and finetune optimisation for BAU use, the team are able to make significant improvements in cloud use over time. Through the life of that agreement so far, we’ve saved another $35,000 a year. That’s paid for the Virtual Cloud Engineer agreement, and some.

Finally, what are your thoughts about finding a partner that can support customers on their continuous cloud journey?

The first and perhaps most important conversation a cloud partner can have with a customer is about value creation.

Brennan’s philosophy is we don’t start with products. Rather, it’s how can we align your technology with your business goals? We always lead with a discussion on the problems we’re solving.

In the cloud space, the problems we’re solving for predominantly revolve around security, cost, and governance. Distil it down further and we’re solving infrastructure problems. But the business benefits – the foundational problems our solutions support – tend to be cloud adjacent: things like custom application development, data and AI, and customer relationship management.

The pleasure I get from working in such a collaborative organisation is that I can connect the Cloud and Infrastructure solutions my teams work on with the diverse specialists that fix those ‘coalface’ issues. I can talk to the Virtual Cloud Engineer for a managed service in Azure, or the public cloud practice in my team can help with consulting and projects. These are the sort of conversations that can only happen in an organisation as interlinked as ours.


Article Sources

  • 1 Reaching your full cloud potential: PWC, July 2021, [online], Link
  • 2 Cloud spending: Gartner India, November 2023, [online], Link

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