A senior leader of a Europe-based global consumer goods business recently shared a change in their long-held belief about cloud computing. They stated they “had always believed that fundamentally cloud would be more efficient than the alternatives” and that “in a globalized economy pooling resources on infrastructure would always work out to be cheaper in the end.” However, they now “no longer believe that!”

The shift in perspective is attributed to the economic realities of cloud services. As the leader explained, “In part that is due to plain old capitalism: cloud vendors make money. So once customers are dependent on them, costs increase. If cloud was always more efficient, fin Ops wouldn’t be a thing.”

The Growing demands on Cloud Infrastructure

“In a globalized economy pooling resources on infrastructure would always work out to be cheaper in the end.”

Adding to the cost concerns are the evolving needs of cloud customers. “To be fair to cloud providers,” the leader noted, “the other issue is the increasing demands of their customers, focused on data, analytics, and AI.” These advanced applications require significant resources, further impacting cloud costs.