• Frank Contrepois, Head of FinOps Consulting at Strategic Blue


• 20.02.2023 10:45 am
#cloud

AWS re:Invent, held in Las Vegas each December is always a very significant event for anyone involved in cloud computing. December 2022 was no different, with presentations from the key staff igniting passionate, yet informed discussions among the 50,000 delegates who attended.

There were discussions about technical issues, product innovations and the latest roster of AWS tools. Yet these were eclipsed by financial and sustainability concerns.

Hanging like a shadow over the whole event was the economic downturn. There have been slightly more positive noises about the global economy since the event, especially from the US, but nevertheless, many of those who attended wanted to know more about issues of expenditure control and planning.

How cloud computing is still saving businesses money

In its nascent years cloud computing was hailed by industry analysts as a way not only for companies to improve efficiency levels and integrate new technology like IoT and edge computing, but also to potentially save money.

Yet as the years have gone by new uses for cloud computing have been discovered and initiated. With continued growth comes cost and concerns over control.  With the economy slowing, the need is to be more efficient in leveraging cloud investments, extending the runway on budgets for start ups and scale ups, and demonstrating value for money

At AWS re:Invent, there were lots of discussions about how both AWS and the companies in the cloud ecosystem can address some of the financial concerns. There are lots of ways to save money in the cloud that are not used and lots of them are non-technical.

So among the many discussions was the ongoing rise of FinOps in which finance and technical teams work more closely together to create a culture devoted to delivering cost-effective cloud computing for companies. For many CIOs and CTOs, bridging the technology knowledge gap with their counterparts in finance has become the top of their agenda.

There were however some finance executives there. They were joined by investors, a significant number of private equity personnel and founders of startups. In addition to the techies I think a lot of people used the show as a due diligence exercise to see if what their CIOs and CTOs were promising were actually achievable.

CFOs would also have instructed their technology-focused colleagues to keep an eye on news of any potential price increases from AWS. Rocketing energy costs have not yet been passed to AWS customers, but there are no guarantees that in the future that price rises to compensate for electricity usage won’t occur. At the current time, AWS is very aware that they have emerging powerful competitors in the guise of Google and Microsoft who have very deep pockets and see cloud computing as a core profit centre, maybe not now, but certainly in the years to come.

The serverless conundrum

One potential way that companies can save money on the cloud is by going serverless. In serverless computing the cloud provider manages the infrastructure and servers, and the user only needs to upload the code and set up the triggers for execution. Serverless computing allows organisations to run their code without having to provision and manage servers. Instead, they only pay for the computing time consumed, which can be more cost-effective and scalable.

Among the many discussions at AWS re:Invent was whether going serverless was a good idea, but also how much could companies save if they adopt those strategies. I have heard some CIOs say that since going serverless, as well as spending time optimising their cloud usage they have reduced their cloud spend by as much as 50%. Others reported savings but said that companies had struggled to make the shift.

Sustainability takes centre stage

One of the original key arguments for migration to the cloud was that it would enable companies to become more sustainable and use less energy. There is now an ongoing debate about whether that is still the case. Cloud adoption creates opportunities for AI usage, edge computing and IoT, and while these can generate new revenue streams they can also have a negative impact on a company’s carbon emissions.

It’s my view, and one that was echoed many times at the event, that the energy reporting figures from AWS simply aren't fit for purpose. And this is in spite of a long chat about sustainability from the CEO.

What sustainability experts were saying is that what they're really passing is the burden to the customer. So they're not giving companies the data, because the data provided on sustainability provided by AWS is so poor.

So you cannot decide as a customer to say I want the most ecological or sustainable approach. If you want to use the most competitively-priced cloud computing, but also the most sustainable it is hard to find the right package as you simply don’t have access to the data.

It’s a challenge that impacts us as Strategic Blue too, and it is a project that we are working on to provide data that enables companies to make cloud savings yet also choose the most sustainable option for them based on the most accurate data we can harvest.

Announcements and upgrades

As is traditional AWS re:Invent featured a string of announcements from the company. There were some tweaks designed to make the console more navigable like AWS Resource Explorer and also amalgamation of existing products such as Amazon Code Catalyst that manages source code issues.

Security was also given top billing with Amazon Security Lake in theory making it simpler to manage both AWS and external security tools.

Overall though it felt like AWS re:Invent was a transitional event. The many new features and updates might be welcome, but I think many CIOs, perhaps pressured by their CFOs, are focusing on how the company uses cloud computing, and most importantly how much it costs them.