Posey's Tips & Tricks

Is a Cloud Backlash Coming?

The cloud has long been touted as the future of computing. But for some organizations, cloud computing has only added more complexity and not enough cost-savings.

For years, cloud providers have been working overtime trying to convince IT pros to move all of their workloads to the cloud. This shift to the cloud is much more than just a logistical platform transition; it's also something of a cultural shift.

For example, I once attended a conference session in which the speaker said that if you are not yet running most of your workloads in the cloud, then you are a dinosaur and completely out of touch. The speaker went on to question whether someone who isn't "all in" on the cloud even belongs in IT.

Interestingly, I think that the tide may be about to turn, and we may soon see organizations moving workloads back on-premises.

I realize that sounds crazy, but let me tell you about a conference that I attended a couple of weeks ago. I overheard four separate conversations during the conference in which a consultant (a different consultant each time) told another attendee that he was super busy helping clients move workloads out of the cloud and back on-premises. Now, in all fairness, I heard additional details in only one of those conversations. In that particular case, the consultant went on to explain that his clients were finding that the cloud introduced needless complexity, and that the cost savings that had been promised really weren't there.

I have no way of knowing if these were the same reasons why the other consultants I overheard were spending so much time helping their clients get out of the cloud. Even so, I suspect that cost is probably the thing that is leading those customers to want to get out of the cloud.

For many years now, cloud services have been aggressively marketed as being the cheap way of doing things. In reality, though, infrastructure-as-a-service (IaaS) providers typically impose charges for every conceivable action. These charges may be tiny, but it doesn't take long for them to add up to a hefty sum.

Consider cloud storage, for example. Cloud providers typically charge their customers a per-gigabyte-per-month fee for storage, but also commonly charge for disk I/O. In other words, an organization has to pay for the privilege of using its own data.

History has at least hinted that variable usage fees tend not to work over the long term. Consider the way that America Online (AOL) provided Internet service to its customers back in the 1990s. For those who might not be old enough to remember, AOL mailed out an insane number of CDs containing the software needed to get online. I have no idea how many CDs it actually mailed out (it was probably in the millions), but according to some estimates, AOL spent about $300 million mailing CDs to prospective customers.

In an effort to entice people into installing the AOL software, the CDs typically included a free trial subscription. I seem to recall getting CDs in the mail offering 150 free hours of service. Yep, you read that correctly.

Back then, flat-rate Internet service was not a thing. AOL and most of its competitors billed customers based on the number of minutes they spent online each month. This practice really isn't all that different from the way that IaaS cloud providers operate today.

Thankfully, per-minute pricing for Internet access eventually gave way to flat-rate pricing. Just imagine trying to use the Internet the way that you do today if you still had to pay a per-minute usage fee. What would it cost to stream a movie, shop for a gift or catch up on social media posts?

The phone companies actually did something similar to what AOL did. In the mid-1990s, phone companies charged a per-minute fee for long-distance phone service. This fee varied based on the time of day. With my family all living out of state, I used to spend a fortune on long-distance bills. Eventually, though, the phone companies abandoned the per-minute pricing for long-distance service in favor of flat-rate pricing.

I think that it is probably only a matter of time before cloud providers make a similar move. Otherwise, I think that at least some of their customers will inevitably look for less expensive options, either on-premises or in competing clouds. Some cloud providers have already begun to offer flat-rate pricing for specific services, but as far as I know, none of the IaaS cloud providers are offering flat-rate pricing across all of their available services.

About the Author

Brien Posey is a 22-time Microsoft MVP with decades of IT experience. As a freelance writer, Posey has written thousands of articles and contributed to several dozen books on a wide variety of IT topics. Prior to going freelance, Posey was a CIO for a national chain of hospitals and health care facilities. He has also served as a network administrator for some of the country's largest insurance companies and for the Department of Defense at Fort Knox. In addition to his continued work in IT, Posey has spent the last several years actively training as a commercial scientist-astronaut candidate in preparation to fly on a mission to study polar mesospheric clouds from space. You can follow his spaceflight training on his Web site.


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