February 4, 2013
Recently, I moderated a CloudU roundtable that continued an ongoing theme of mine –overcoming the hurdles to greater cloud adoption. In this case we looked deeply at the cloud cost area. This is a really important problem space to resolve.
You see, depending on your perspective, the fact that cloud computing means that technology is democratized and available to all is either the best thing ever, or the worst thing ever. For business units it’s great – it gives them the ability to acquire technology without going through the often long and torturous process with IT. For IT and CFOs, however, technology democratization is painful – it means they lose control and visibility over what people are using and what costs are being incurred by the company. That can result in some big surprises at the end of the month, quarter or financial year.
It was awesome then to talk with Tyler Sloat, CEO of subscription and billing vendor Zuora, and Mat Ellis, CEO of cloud spend management company Cloudability (disclosure, I’m an investor in Cloudability) to get their perspectives on this cloud cost conundrum.
We started off by setting a little bit of context: I detailed exactly why I believe the cloud is a revolution rather than an evolutionary step for technology, and why the democratization that cloud produces is both a positive and a problematic thing for organizations. We talked about the balance that organizations strive to find between control (for IT, the CFO and the C-suite generally) and agility.
Some questions we talked about included:
- Why is cloud cost so complex?
- What is the CFO perspective on how you think about this problem?
Finally, we talked about specific ideas for solving the problem – Mat Ellis set out a four-step cycle of continuous improvement when it comes to managing cloud cost issues:
- Tell finance to categorize cloud expenditure in a special place to keep an eye on it.
- Obtain a cloud cost management solution to avoid any surprises.
- Review costs. Ask questions (Can we do more with less?). Optimize.
- Hold people accountable for their spending.
It was an interesting discussion that revolved around an important, but often ignored, issue. You can check out the replay below.