Cost, Transparency, and the Current State of the Cloud

 Cloudyn, cloud monitoring leader, invited the respected cloud blogger, Ofir Nachmani, to interview Bernard Golden. In their session, they dove deeply into the the current state of the cloud and the challenges that cloud consumers face within their growing cloud environment. We invite you to enjoy their stimulating and insightful discussion.

Cloud Transparency and Maturity

Ofir Nachmani: Three or four years ago, the market was still immature. Cloud customers’ environments were small and enterprises weren’t in the picture yet. In your opinion, what changes have occurred in the past five years regarding the need for cloud transparency in cost optimization and security, and need for the emergence of cloud cost optimization services like Cloudyn?

Bernard Golden: I think that we're in the period of developing this maturity. The companies that have done significant work with the public cloud require knowledge to track what they’re running, assign it to who's responsible, make sure they know what they’ve got, and understand the costs involved. This is often driven by parts of the organization that are significantly using the cloud within the general IT sphere. These tend to be certain segments of the organization, often the leading digital initiatives, and so forth.

I think that the general awareness of transparency needs to be tracked across all infrastructures, and not just public cloud infrastructures. This is still developing because enterprise IT comes from a legacy mindset and set of processes; it's a cost center, a capital investment, and there isn’t a direct tie to business offerings. Let me give you an example. If you're in the marketing department of your company, and your goal is to drive awareness of your products and services, and to drive leads, the cost per lead is the most critical thing to consider. It would be a fantastic scenario if the lifetime value of a customer is a thousand dollars, and the cost of the lead is two hundred. However, if the lead cost is fifteen hundred dollars, it wouldn’t be very beneficial. Ultimately, the ability to understand the marginal cost per unit is extremely important. If IT continues to get stuck in big capital investments and lumpy allocation, rather than transactional cost transparency, the ability to understand the marginal costs gets bypassed.