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The paradox of the cloud economist

Image: Adobe Stock / jullasart

Mark Turner, CCO at Pulsant, explores the idea of the “cloud economist”, and how repatriating back to the data centre rather than wrestling a cloud setup may be the most sensible solution for many businesses.

For much of the past decade, the cloud has been presented as an operational panacea. Many assume that the more processes you put into the cloud, the cheaper, simpler, more agile, and robust your business becomes.

Collectively, we hold the cloud in such esteem that it’s used by the highest powers in the country, with the UK government mandating a ‘cloud only’ policy for key departments as far back as 2013. It’s even presented as a solution to international crises; the US’ National Library of Medicine once hailed cloud computing as “a saviour to fighting the Covid-19 crisis.” That’s some endorsement.

As a result, it’s normal – even expected – that most businesses buy in. PwC’s 2023 Cloud Business survey found that, for 78% of executives, their employer uses the cloud in most areas of their business.

There’s a layer of gloss that needs to be stripped back here. That same PwC survey finds that more than half of businesses aren’t actually getting what they want from the cloud.

For some applications, the cloud does offer cheap flexibility, but for many others, that’s not the case. It can be incredibly expensive – and when it is, it can be difficult to escape.

Cost of doing business

While cloud technology itself is flexible by design, the economic realities must be factored in – and with the complexity of the cloud, that isn’t easy.

For one, cloud services are usually paid based on consumption billing – in layman’s terms, you pay for what you do. Moving data, running analytics, and taking data in and out of the cloud environment are all incrementally charged processes.

Beyond that, price hikes are entirely up to the cloud provider. Liftr Insights has suggested that the price of on-demand compute for AWS have risen by 23% over the past four years; Salesforce has increased prices by an average of 9% just this year. Costs are creeping up.

These pressures are contractually mandated, too. When you sign a deal with a cloud provider for X years, and costs increase in the interim, your cloud operations can be under serious threat.

Complexity multiplies these challenges. A business reliant upon multiple cloud providers, for example, will not only have different terms and costs to factor into potentially codependent parts of their business – they’ll also need an employee skillset that accommodates those solutions. Changing provider can have serious ripples up the chain.

All of this adds up to what you might consider a deliberate trap. Having locked themselves into contracts and OpEx billing, many businesses are left baulking at the cost it takes just to move their data, and at the logistical effort required to fix things.

The paradox

The ‘cloud economist’ role is a response to this state of play – a specialist tasked with making cloud operations more cohesive, integrated, and as cheap as possible for the task at hand.

Of course, this isn’t a one-man show. You’ll need an economist trained in each cloud environment you use, on top of a team of engineers that can integrate new processes without vandalising other systems across the business. That means more cost, and more time waiting for your cloud solution to function as intended.

What’s the result of all this extra investment? Well, that’s the paradox of the cloud economist: success makes them redundant.

The role is contingent on a problematic cloud. If a business’s cloud operations aren’t a problem, it doesn’t need cloud economists. But if the cloud is never going to be the right solution, ironically, an economist remains important – along with their associated expenses.

If complexity drives price up and up, then simplicity reduces it. Why, rather than commit to perpetual investment in an unfit solution, would you not move away from the cloud instead?

Simplicity is a virtue

In something of a counter-cultural movement to the cloud’s hegemony, it can be cheaper and less painful to repatriate away from the cloud into an on-premises or data centre-based environment.

Repatriation is essentially reverse migration – taking processes and assets out of the cloud and locating them closer to home. Businesses can save an immense amount of money moving to CapEX spending, claiming a greater agency over the things they’re storing without bleeding funds on specialists to solve a now non-existent problem.

LinkPool, a chainlink node service provider, is an interesting example as a company that developed much of its tech based on a major cloud provider. The company’s move to a data centre environment significantly cut back on costs while drastically simplifying its tech stack, with local data centre storage and the speed of edge computing actually improving performance. Developing its offering on the cloud didn’t stop LinkPool from repatriating when the business felt it benefitted them most.

All of this isn’t to suggest that the cloud can’t offer value. For the right applications it can unlock greater flexibility, free employees from set locations, and accelerate operations across the board.

What it isn’t is a blanket solution for every frustration. For many, a war of attrition with the cloud beast just might not be the answer. Repatriation can not only save money, time, and energy; it also renders the paradox of the cloud economist moot.

Mark Turner
Mark Turner
CCO at Pulsant

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