Cloud and costs and Extracting more value from Software licenses.

Cloud and costs: A New Dawn for South African Businesses.

It’s cloudy out there. Cloud-native, public cloud, multi-cloud, hybrid cloud, cloud strategy and cloud-shaped ingenuity, so why is South Africa not following in the global footsteps of adoption.

Public cloud end-user spend is anticipated to reach $600 billion by the end of this year and around 92% of companies have invested in a multi-cloud strategy. A recent Google Cloud Brand Pulse Survey found that around 41% of cloud leaders are increasing their use of cloud-based services, Gartner found that more than 50% of companies will use cloud to accelerate business initiatives, and the 2022 State of DevOps report found that companies using cloud are 14% more likely to exceed performance goals.?And yet, despite the slurry of statistics that underscore the value of cloud, South African companies remain hesitant.

“This is not a case of?South Africa lagging behind, it’s more the perception of cost,” says Heath Huxtable, Managing Director at Braintree. “There is a view that the cloud will be expensive and so companies are hesitant to invest.”

It’s an understandable concern. Bill shock has become a common cloud problem as companies find their feet within virtual infrastructure. This is largely due to limited visibility into cloud spend and usage and one of the reasons FinOps has gained traction over the past few years. It also hasn’t helped the case for clouds.

“Companies need two things - visibility and numbers,” says Huxtable. “They want to know what their teams are buying, where the costs are coming in, and what fine print they need to be aware of. It’s a realistic task, especially in the current climate. The spend on cloud should align with the benefits promised and the costs estimated.”

Cloud can and will save the business money if it is managed correctly. It is not an enormous slice out of the budget that won’t recoup its value. As Huxtable points out, “You need to take a five-year view as this is the replacement cycle for infrastructure in an on-premises environment. Sure, cloud is a monthly subscription cost that can get you close to the original cost of your five-year investment, but it doesn’t involve the reinvestment element. You don’t need to repurchase the hardware, the software, the licenses - they’re always available in the cloud.”

“When we do business application replacements in the business, there’s around 25% staff turnover because people don’t like change,” says Huxtable. “They’re concerned about security, their ability to do their job and the time they need to spend learning new systems. It’s understandable, so changing the perception of the South African business goes beyond the price tag, it’s about people.”

Effective change management coupled with a process of continuous learning will empower people to make the most of a cloud investment. Wed this to the optimisations and cost savings that cloud can introduce, and suddenly the business is more agile and productive. Cloud success is about realistic implementation within set budgets and measurement against key metrics to achieve a solid foundation from which the business can grow.

Extracting more value from software licenses is key for businesses frustrated with sub-par usage.

As the world becomes accustomed to cloud computing, licensing has become a major pain point for businesses whose costs continue to rise while they don’t see a requisite rise in value, says Braintree Managing Director Heath Huxtable. He adds that managing the regret of licensing, lies in choosing to work with consulting partners who sell value-added services as opposed to license resellers.??

Unlocking value

Huxtable says that there is a glaring need for partners to unlock value for customers so that licensing shifts from a bugbear to something that demonstrably improves their businesses and drives efficiencies. “A lot of the solution lies in what I like to call wrap-around services,” he explains.?

“This type of exercise is not possible when simply clicking onto the Office website and buying a license, or procuring through a reseller. A consulting partner, on the other hand, exists to consult around services and software. That’s a differentiator that almost immediately takes licensing from the realm of business irritation to business value.”

Huxtable says that by anyone’s estimation, spending R500 and using R90 worth of services is frustrating. He says that to counter this, businesses would do well to actively seek out partners that prioritise managing licensing costs and consumption in alignment with their business expectations. “Ultimately, the exercise is to shift customers to a space where they are making full use of what they pay for, and not paying more for something that they don’t use. It is a simple concept, but one that many businesses are yet to fully realise.”