Where are Swedish organizations in terms of cloud adoption? How far have they come and are anything holding them back? Listen to Malin Andersson and Anders Eriksson giving their view of where the market is today.
The talk is in Swedish.
There is much that suggests that a Cloud First Strategy – a CFS in TIQQE language – is the best for all companies and organizations. But what does a Cloud First Strategy actually mean?
For us at TIQQE, it simply means that if there is an opportunity to use the cloud and there are no barriers of the type of legal, technical or unreasonable customer requirements, then it is the cloud that rules. Pronto. Period. Basta! When you five years ago had to argue repeatedly to move something in to the cloud and often got a NO. Today it should be just as difficult to get a YES to stay in your own data center without overwhelming evidence that it benefits the business and facilitates the customer experience.
Classic arguments against the cloud that it is expensive and that the cloud is not secure are today arguments that should be heavily questioned when presented. TIQQE has covered these two arguments, opinions or myths into two blog posts; Is The Cloud Secure? and The Cloud is Expensive.
If we go back to the question posed above; What does a Cloud First Strategy actually mean? In this blog post I will sketch the foundations of a Cloud First Strategy (CFS). All a result learned together with our customers over the years.
The CFS (and for the last time – Cloud First Strategy) is by nature something to follow when creating some new systems or services or when refactoring older legacy systems or services. It’s an important strategy to have when moving away from an on premise IT environment, to a cloud-based one. It helps to manifest ambition and direction and give guidelines in decision making. But it also stands entirely on its own for new development of systems and services. Whatever the case, it is an important tool for establishing a Cloud First mindset and point out the direction.
When creating your CFS, it is basically one question that must be answered first. It is about the degree to which the new service or system has the potential to differentiate you (give you competitive advantages) in the marketplace vis-à-vis competitors and other industry players.
In a CFS, there are two principles that will guide you in finding the answer on that question. If the service or system you consider to develop or want to refactor:
As stated above, there are two different ways to answer the question. But both paths lead to the cloud. A true CFS. But a CFS cannot work in a vacuum. It must also work for companies older than ten years and who were not cloud native when founded. To supplement, some type of guidance is needed in order to help making the right decisions. This priority staircase can look like this. It is listed in the order you should consider the different options when making decisions.
By basing a CFS on the above principles and priorities, we capture not only the appealing features of the cloud that Cloud Native companies benefit from all ready from start, but also the complexity that every organization has that was not founded when Cloud Native was the tune.
For me, it is obvious that every organization that wants to be relevant in their marketplace in three to five years must have a CFS established. Why not do it now and take the lead in your market today. Instead of standing left behind when the train leaves the platform! No excuses. You have the recipe above!
Everyone in Sweden knows about the bankruptcy estate of Saab which was acquired by NEVS in 2012. NEVS is part of the Evergrande Group, ranked as number 138 on the Fortune 500 list of top global companies. The reason why NEVS exists is to fight air pollution, congestion and climate change according to NEVS vision – shape mobility for a more sustainable future.
NEVS is now executing a plan to bring the vision to life by building shared autonomous electrical vehicles which will be introduced to the market within the next few years.
TIQQE will develop and build a scalable and well-architected cloud infrastructure based on state-of-the-art serverless technologies and high-level cloud services. The infrastructure will serve as the backbone when monitoring, controlling and connecting the physical vehicles and the end-customers mobile apps as well as third party service providers in a groundbreaking consumer service.
We talk with a lot of customers in our outbound sales activities and two of the most common opinions about the cloud is that it is not secure and it is more expensive. We will cover the security aspect in another post and focus this one on the cost part of cloud vs. on-prem.
Is cloud more expensive than running a datacenter on prem? It is not a simple question to answer and there are no generic answers, it depends on a number of factors and the comparison is not a simple task. Several factors needs to be taken into consideration. However, the fact that the majority of the IT managers we talk to consider cloud more expensive shows that the market is still in its early phase.
When asking a couple of follow up questions, it turns out that the comparison often consists of comparing the cost of a server with a similar specified workload in the cloud. That is a too simplistic comparison and the cost of a server needs to be put in a wider context of IT cost structures. When buying a workload from a public cloud provider, a lot of things are included in the cost such as:
A typical comparison of server costs (red) vs. cloud workloads (yellow). Cloud turns out to be much more expensive
Source: AWS Cloud Economics
A full cost comparison between a datacenter and cloud shows a different picture. Cloud is usually between 30-50% less expensive.
Source: AWS Cloud Economics
Even if a server is cheaper than a similar specified cloud workload, cloud is still more cost efficient than running a datacenter when considering all related IT costs.
Besides lower costs, there are other financial benefits for an organization to move to cloud, for example tied up capital and cashflow.
Cloud providers practice a subscription based business model which means that customers do not need to invest in infrastructure. Almost every organization today have infrastructure which is treated as inventories and an asset in the company balance sheet. The capital tied up in infrastructure could be used for more revenue generating capital investments instead of taking on more debt. There are also rumours around the accounted value of infrastructure assets. Some argue that as cloud providers continue to gain market share, infrastructure in datacenters will be valued less in an event of a financial audit. I can’t find evidence that proves that such a valuation is in practice but it doesn’t seem unrealistic in the future, outdated technology are simply valued less.
From a cashflow perspective, cloud services do not require any upfront investments such as refreshments of infrastructure or software which will have a positive impact on cashflow.
To summarize; yes, a single server is usually cheaper than a similar workload in the cloud but from a holistic perspective, taking all costs into consideration, cloud is much more cost efficient. According to our own experience when engaged with customers, we find potential savings of around 30-50%. Combined with capital and cashflow benefits, all companies should evaluate a transition to cloud.
Besides costs, another common opinion about The Cloud is that it’s not secure. Read Kennet Wahlbergs blog post “Is The Cloud secure?”.