Austerity & The Cloud

The UK Chancellor of the Exchequer Jeremy Hunt delivered his fiscal plan to “tackle the cost-of-living crisis and rebuild our economy” confirming that the government’s three priorities are “stability, growth and public services.” He also added: “I want to combine our technology and science brilliance with our formidable financial services to turn Britain into the world’s next Silicon Valley.” The Chancellor’s bullish words were followed up when he outlined a package of measures equating to a consolidated total of around ￡55bn in spending cuts and tax rises.

It will be an interesting exercise to see how it all plays out given the paucity of incentives to boost the fortunes of cloud-first businesses. R&D tax reliefs are set to be reformed to include some cloud and data costs but beyond that there was little to excite the entrepreneurial spirit. Clearly, the current economic challenges are the most pressing but unless they’re tackled more efficiently, businesses may struggle to innovate sufficiently to create the necessary technology infrastructure.

Since the country went into recession which (arguably) follows a decade of austerity – costs and cost-savings are key issues particularly when it comes to cloud-dependent organisations. Most companies in the UK (and probably the world) are now ‘cloud-first’ – an addiction that has been encouraged by the liberal application of cloud credits. For those organisations who have discovered the cloud’s many benefits (compared to ‘on-prem’ options) – they will also have discovered a hidden downside. Unless the beast of ‘out-of-control costs’ is bought under control, the price of being in the cloud can eat your company alive.

Many small to mid-size companies spend a decent size six-figure sum on their cloud infrastructure. Imagine the shock if you were a CFO/FD of one of these businesses and came in one morning to find a 60% increase in your monthly bill from either AWS, GCP or Azure. It might spoil your day, to say the least. If this sounds far-fetched or fanciful, it is not. Analysts like Gartner and Forrester continually tell us that businesses are still wasting massive amounts of cloud resources because companies simply do not have an accurate way of knowing exactly what they are using.

Like many fiscally responsible businesses, we conducted our own cloud cost-cutting exercise recently, using?CloudMarshal?to cut our bill in half. What is more, it took us under two hours to do so over three platforms. The FD was delighted, as were the DevOps team who continued with their day job without any disruption. Taking an automated approach needs an appropriate technical solution, but it can be done quickly and effectively with the right toolset.

If the UK wants to become the desired technology powerhouse, all participants need to take care of the financial nuts and bolts – particularly their cloud costs (where huge savings can still be made). The entrepreneurial spirit is often tested in austerity but it behoves all of us to make the best of it and turn challenges into opportunities. It is probably not worth waiting for the Government to offer us incentives for technical innovation in the current climate and we will have to find our own ways of?‘venture assistance’. Perhaps, looking for hidden cost-savings is a great way of stretching the runway. As another British Chancellor, Lord Chesterfield said in 1747: “Take care of the pence; for the pounds will take care of themselves”