Matthew Lynn, Director, Cloud Computing, APJ, Akamai Technologies.
Companies are rethinking — even questioning — their original cloud investments and feeling the pressure of bill shock and other challenges associated with contained hyperscale environments.
In fact, many companies are struggling with “cloud fatigue,” according to Akamai Technologies’ APJ director of cloud computing, Matthew Lynn.
Akamai is a cloud company that powers and protects life online. On any given day, it supplies 15 to 30 percent of the Internet.
“It’s more and more common that cloud doesn’t necessarily deliver on many of the original promises. If we go back 10 years, many companies said, ‘I have to move all of my IT to the cloud, and I have to do it on a single platform.
“What’s more, people originally thought that cloud would relieve cost. Yes, it brought a lot of agility and speed to IT operations, but at the same time customers realized it came at a significant financial penalty. It may have looked really good to begin with, but as organizations scale, that cost has become a key factor.”
Akamai, for its part, focuses on three main technical pillars – contact delivery, security and cloud computing – and is aggressively strengthening its presence in the cloud arena after the acquisition of Linode, which creates a cloud-to-cloud distributed computing platform. edge
Lynn said many companies are reevaluating their cloud options — a move spurred in part by the multi-cloud momentum — driven by multiple factors, including affordability, minimizing downtime and data loss, and avoiding vendor lock-in.
“There’s a dynamic change today as more companies realize they need to go to multi-cloud infrastructure – and they need to bring some contention into their underlying infrastructure strategy to have multi-cloud capability.”
Complicating matters, according to Lynn, is the fact that there is a “cloud oligopoly” that is strangling the industry.
“Although many people believe that there is a lot of market competition, in reality there is an oligopoly and we see the margins (of hyperscalers) increasing – from 18 to 30 percent in the last few years.
“Undoubtedly, the giants of cloud computing are competing to protect their fat profits. More and more IT companies are contributing a large amount of their costs and their COGS (cost of goods sold) to these dominant suppliers – and it’s holding their businesses back.”
According to Lynn, cost is still an important factor. “Cloud bills typically increase by about 30 percent per year.
The biggest cloud spenders have taken action to control spiraling costs. Airbnb, Dropbox and Netflix have recently stated that they have significantly reduced their cloud costs by bringing some systems on-premise or distributed across multiple cloud providers. Airbnb, in particular, reduced cloud costs in 2020, achieving savings of $63.5 million.
“For large organizations – especially in this climate – there is no longer an issue of growth at all costs across the environment. Many of these high-tech companies now have to rethink how they drive margins and profitability across the business.”
So, what is the answer to these growing and ultra-constraining challenges stifling the industry?
Explore alternative cloud options, Lynn said, and start planning for the future to ensure companies don’t get locked into a single provider and can maintain control of their destiny.
“Adopt alternative cloud solutions that offer simplicity, cost-effectiveness and open source, and make it simple, affordable and accessible for developers to consume cloud computing,” he said.
And the message is timely, as Australia’s cloud computing spending will hit $20 billion by 2025, according to GlobalData.
In fact, businesses of all sizes will look to invest in the cloud to drive their transformation projects by allowing them to automate business processes, use digital channels for better customer interactions and support their workforce in remote work.
“At Akamai, we want to shake up the market. We have a new cloud computing offering in Linode that brings a lot of simplicity, cost-effectiveness, ease of use, open source and distribution to that whole story as well.
“There is now more and more open source technology and tools that enable organizations to build, run and secure applications from the cloud. Instead of having to use all the proprietary features in an existing cloud provider, there are now tools like Kubernetes, Terraform, and Ansible, and a few others, that allow organizations to do this in open source.
The beauty of open source functionality means the freedom to choose, Lynn explained.
“Many customers feel very locked in with their existing hyperscale clouds. Linode is very focused on open source technology because it enables users to move their cloud workloads to the most efficient location.”
But expect it to be a journey, and not a quick one. “It’s not necessarily a simple transition for many organizations. But we urge them not to be complacent. Don’t just sit there and keep using the same tools. Plan on how you will build some contention into your environment two or three years down the road.
“Start thinking a little differently about delivering the right workload from the right infrastructure.”