Matthew Lynn, Director, Cloud Computing, APJ, Akamai Technologies.
Companies are rethinking – even questioning – their real cloud investments and feeling the pressure of bill shock and other challenges associated with hyperscaler locked-in environments.
In fact, many companies are struggling with “cloud fatigue,” according to Akamai Technologies’ APJ director of cloud computing, Matthew Lynn.
Akamai is a cloud company that powers and secures life online. On any given day, it accounts for 15 to 30 percent of the Internet.
“It is becoming more and more common that the cloud does not fulfill many of its promises. Going back 10 years, a lot of companies were saying, ‘I need to move all of my IT to the cloud, and I need to do that in one place.
“In addition, people initially thought that the cloud would reduce costs. Yes, it has brought a lot of agility, and speed to IT operations, but at the same time customers have realized that it has come with a significant financial penalty. It may seem like a good idea to begin with, but as organizations scale, that cost has become a significant factor. ”
Akamai, on the other hand, focuses on three main pillars of technology – the delivery of communication, security, and cloud computing – and is strongly increasing its presence in the cloud field after the acquisition of Linode, creating a distributed computing platform from the cloud to itself. the edge.
Lynn said many companies are reevaluating their cloud options — a move fueled by the multi-cloud push — driven by a number of factors, including affordability, reduced downtime and data loss, and avoiding vendor lock-in.
“There is a paradigm shift today as more companies are beginning to realize that they need to move to a multi-cloud infrastructure – and they need to bring flexibility to their core infrastructure to have multi-cloud capabilities.”
Complicating matters, according to Lynn, is the fact that there is a “cloud oligopoly” taking part in the industry.
“Although many people believe that there is a lot of competition in the market, in reality there is an oligopoly and we are seeing the margins (of hyperscalers) increase – from 18 to 30 percent in recent years.
“There is no doubt that the cloud computing giants are fighting to protect their fat profits. More and more IT companies are dedicating a large amount of their costs and their COGS (cost of goods sold) to these leading suppliers – and it’s slowing their business.”
According to Lynn, cost continues to be an important factor. “Cloud bills tend to increase by 30 percent every year.
The big spenders of the cloud have taken the initiative to dominate the rising costs. Airbnb, Dropbox and Netflix recently said they have significantly reduced their cloud computing costs by bringing some systems on-premise or distributed across multiple cloud providers. Airbnb, in particular, reduced cloud costs in 2020, achieving savings of US$63.5 million.
“For large organizations – especially in this climate – there is no longer a total increase in all their costs that affect the environment. Many of these leading technology companies now have to rethink how they drive margins and profitability across the business.”
So, what is the answer to these growing challenges and tough restrictions that are hampering the industry?
Investigate other cloud options, Lynn says, and start planning for the future to ensure companies aren’t locked into a single provider and can’t control their own destiny.
“Embrace other cloud solutions that offer simplicity, cost-effectiveness, and open source, and make it easy, affordable and accessible for developers to use cloud computing,” he said.
And the message is timely given that Australian cloud computing spending will reach $20 billion by 2025, according to GlobalData.
In fact, businesses of all sizes will look to invest in the cloud to drive their transformation projects while allowing them to automate business processes, use digital channels for better customer engagement and support their remote workforce.
“At Akamai, we want to shake up the market. We have a new cloud computing offering at Linode, which brings more simplicity, cost effectiveness, ease of use, open source and distribution to the whole story.
“There are now many open source technologies and tools that allow organizations to build, run and secure applications in the cloud. Instead of using all the proprietary features of an existing cloud provider, there are now tools like Kubernetes, Terraform, and Ansible, and a number of others that allow organizations to do that in an open source way. ”
The beauty of open source functionality is freedom of choice, Lynn explains.
“Many customers feel very trapped within their existing hyperscale clouds. Linode has a strong focus on open source technology because it allows users to move their cloud workloads to a more efficient environment. ”
But expect it to be a journey, not a quick one. “It is not an easy change for many organizations. But we encourage them not to be complacent. You can just sit there and continue using the same toolsets. Plan how you will build conflict in your area two to three years out.
“Start thinking less about delivering the right work from the right infrastructure.”