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Thing is, cloud computing is actually quite expensive. There's a reason why Amazon, Microsoft, Google, IBM are all lining up to grab a piece of the pie. Yes th

by Abhinav2000 6y ago

Thing is, cloud computing is actually quite expensive. There's a reason why Amazon, Microsoft, Google, IBM are all lining up to grab a piece of the pie. Yes there are economies of scale which means overall the cost should be lower, but once you factor in profit margins, I'm not sure. The main benefit is definitely not requiring as much technical acumen or teams to build your infrastructure, but as more skilled workers enter the labour force, I think that too will start to get marginalised to some degree and teams will shift back to having their own IT departments. Just a guess. I personally hate the cloud, way too expensive for me and the design choices they do are geared towards profit maximisation and not building a partnership with customers where both win. E.g. so many different modules, each with limited functionality...when I can just run my own virtual server and do everything myself much better

dominotw 6y ago
> but as more skilled workers enter the labour force, I think that too will start to get marginalised to some degree and teams will shift back to having their own IT departments I am not sure if this would the case though. Why would an employer use skilled workers to do something mundane like setting up a kubernetes cluster vs something that actually differentiate their own business from others.
- dcolkitt 6y ago
  Large and established businesses hire high-paid high-skilled workers to coordinate their legal affairs, maintain their accounting, manage their public image, and control their finances. None of those things are part of the core business or product differentiation. Yet large corporate orgs still expend enormous amounts of resources on those activities. In fact in most companies the second highest-paid executive is the COO, which pretty much just means the guy in charge of all non-core activities. I think the simple answer is that most corporates are highly risk averse. Being in startup culture blinds you to this. Startups are comfortable with existential threats in the background, because they're constantly on the verge of failure anyway. They might neglect their liability, public image, or cloud TOS risk. Fast innovation in the core product is a far higher priority for a hypergrowth startup. In contrast, large and mature organizations are going to be extremely sensitive even to small risks. The typical large company is slow-growing but highly profitable. The number one priority is to avoid killing the goose that lays the golden egg. Think of the most conservative, bean-counting , button-down loan officer in suburban Topeka. Once "Cloud TOS Risk" enters the business lexicon, said beancounter is likely going to insist that the company in question has a plan, before releasing the tens of millions in loan refinancing that modern corporate America relies on in their leverage capital structures. It doesn't matter how big of an actual risk is. These processes are driven by "check-the-box" CYA theatre.
- Abhinav2000 6y ago
  Partly due to cost-benefit. I am hopeful that there is such a large mass of skilled labour or labour that can be skilled (so many graduates these days), that we can give them jobs and avoid having everything tech infrastructure related being pushed off to the big cloud vendors. As another comment replying to you mentioned, firms hire in-house accountants, lawyers, etc. --> If the cost of tech employees becomes favourable vs. outsourcing to the cloud, then why not internalise? Its a big risk to put all your eggs in somebody else's hands. With in-house tech, you have somewhat more control. My 2c.
OzzyB 6y ago
The fact that all the top-line Cloud hosts are really (really!) expensive just adds insult to injury; so perhaps this will start to accelerate the plans of those looking for contingencies. The good news is that we now are in the era of K8s and cheap(er) CPUs (AMD), so there are a lot more options now than just "betting on AWS". Funnily enough, I'm now starting to think that the only reason AWS proliferated as much as they did was to only fuel the VC capital boom of the last decade and not much else. Startups we able to promise huge valuations and returns based on the belief that AWS would "scale for us" and they didn't really need the inhouse expertise needed to grow. Just sell the growth.
- Abhinav2000 6y ago
  That's an interesting angle and makes a lot of sense - lot of these tech startups are not run by tech people, so having AWS helped them bridge the gap when it came to securing funding.

dominotw 6y ago

> but as more skilled workers enter the labour force, I think that too will start to get marginalised to some degree and teams will shift back to having their own IT departments I am not sure if this would the case though. Why would an employer use skilled workers to do something mundane like setting up a kubernetes cluster vs something that actually differentiate their own business from others.

dcolkitt 6y ago
Large and established businesses hire high-paid high-skilled workers to coordinate their legal affairs, maintain their accounting, manage their public image, and control their finances. None of those things are part of the core business or product differentiation. Yet large corporate orgs still expend enormous amounts of resources on those activities. In fact in most companies the second highest-paid executive is the COO, which pretty much just means the guy in charge of all non-core activities. I think the simple answer is that most corporates are highly risk averse. Being in startup culture blinds you to this. Startups are comfortable with existential threats in the background, because they're constantly on the verge of failure anyway. They might neglect their liability, public image, or cloud TOS risk. Fast innovation in the core product is a far higher priority for a hypergrowth startup. In contrast, large and mature organizations are going to be extremely sensitive even to small risks. The typical large company is slow-growing but highly profitable. The number one priority is to avoid killing the goose that lays the golden egg. Think of the most conservative, bean-counting , button-down loan officer in suburban Topeka. Once "Cloud TOS Risk" enters the business lexicon, said beancounter is likely going to insist that the company in question has a plan, before releasing the tens of millions in loan refinancing that modern corporate America relies on in their leverage capital structures. It doesn't matter how big of an actual risk is. These processes are driven by "check-the-box" CYA theatre.
Abhinav2000 6y ago
Partly due to cost-benefit. I am hopeful that there is such a large mass of skilled labour or labour that can be skilled (so many graduates these days), that we can give them jobs and avoid having everything tech infrastructure related being pushed off to the big cloud vendors. As another comment replying to you mentioned, firms hire in-house accountants, lawyers, etc. --> If the cost of tech employees becomes favourable vs. outsourcing to the cloud, then why not internalise? Its a big risk to put all your eggs in somebody else's hands. With in-house tech, you have somewhat more control. My 2c.

OzzyB 6y ago

The fact that all the top-line Cloud hosts are really (really!) expensive just adds insult to injury; so perhaps this will start to accelerate the plans of those looking for contingencies. The good news is that we now are in the era of K8s and cheap(er) CPUs (AMD), so there are a lot more options now than just "betting on AWS". Funnily enough, I'm now starting to think that the only reason AWS proliferated as much as they did was to only fuel the VC capital boom of the last decade and not much else. Startups we able to promise huge valuations and returns based on the belief that AWS would "scale for us" and they didn't really need the inhouse expertise needed to grow. Just sell the growth.

Abhinav2000 6y ago
That's an interesting angle and makes a lot of sense - lot of these tech startups are not run by tech people, so having AWS helped them bridge the gap when it came to securing funding.