Cloud Technology News of the Month: May 2021

Another portion of cloud technology news is at your doorstep! This series brings you up to speed with the latest releases, acquisitions, research, and hidden gems in the world of cloud computing – the stuff actually worth reading. 

cloud technology news may

Here’s what the cloud world has been up to this May.


Story of the month: “You’re crazy if you don’t start in the cloud; you’re crazy if you stay on it.”

Ok, this isn’t exactly news. But the analysis from a16z deserves your attention.

Here’s the gist of the piece:

  • While cloud delivers on its promise early on, once your company scales and its growth slows down, cloud costs start putting pressure on margins and contribute A LOT to COR or COGS.
Estimated annualized committed cloud spend as %
Source: a16z
  • Repatriating (going on-prem) is one solution. Dropbox achieved a smashing $75 million in cost savings by doing that.
  • 50 top public software companies using the cloud are losing c. $100 billion of market value due to cloud impact on margins (relative to running the infra on their own).
  • The total impact is potentially more than $500 billion in cost savings.

Here’s where it gets really interesting:

Committed cloud spend is typically ~20% lower than actual spend and some companies a16z spoke with reported exceeding their estimations by at least 2x!

Does this mean that mature companies should move to on-prem? Not necessarily. After all, building your own data center involves a massive effort. And the cloud still offers perks like on-demand capacity and plenty of existing services that can instantly support new projects and locations.

How to deal with the long-term cost implications of the cloud? a16z argues that infrastructure spending should become a first-class metric – and we totally agree with that!

But they failed to mention one good solution enough: the fact that infra costs depend on a team’s ability to provision “just what you need.” Cloud cost optimization is the low-hanging fruit here. It lets you stay where you are, but for half of the cost. 


The Business of Cloud

Vodafone and Google Cloud Platform are teaming up to jointly develop data services. 1k employees will be working on Nucleus, a new cloud-based storage and analytics portal capable of processing ~50 terabytes of data per day in the cloud. So, Vodafone data will end up on Google Cloud servers (and probably stay there for the entire six-year agreement).

Source: Financial Times

On another note, SAP is loosening its relationship with Microsoft Azure as a preferred vendor for hosting S/4HANA. Now SAP will encourage customers to host the solution wherever they want thanks to expanded support for the other providers (AWS, Google, and Alicloud).

Source: CIO 

Edge computing is here, with a projected spend of $240.6 billion through 2024! Take Red Hat as an example – it recently launched an edge-computing platform that operates across multiple cloud services. Most companies turn to edge computing when transferring data back and forth becomes too expensive, for real-time responses, and semi-automated functions. We’re curious to see how this aspect of cloud computing develops.

Source: WSJ

Remember that AI & cloud computing shopping spree of IBM? Well, here’s something new. IBM is pivoting towards cloud services + AI with Watson Orchestrate. “In the same way that we electrified factories and machines in the past century, we will use hybrid cloud to infuse AI into software and systems in the 21st century,” said IBM’s CEO Arvind Krishna. How are companies going to use the new Watson? Only time will tell.

Source: Bloomberg


New in CAST AI

EKS cost optimizer

Last month, we shared the brand-new EKS Optimizer with you. Your feedback inspired us to fast-track the development of something similar – only this time, to help those who use Google and the GKE platform. 

Introducing: GKE Analyzer

GKE Analyzer goes through your cluster costs, pinpoints any potential savings you could achieve, and then tells you how to get there.

Here are some new product features hot off the press:  

  • Blog
  • Cloud Technology News of the Month: May 2021

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