Status Go: Ep. 214 – The Cloud is Too Expensive – Expert Perspective | John Gray

Summary

On this episode of Status Go, host Jeff Ton is joined by John Gray to debunk the myth that cloud technology is too expensive for some businesses. They discuss examples of companies who initially faced high cloud costs due to lack of optimization, but with help from experts, were able to optimize and save money. The John highlights how cloud technology allows for quick and easy setup, but poor execution can impede a business. They recommend regularly evaluating technology and services for cost-effectiveness, and suggest bringing in a skilled partner to optimize workloads and applications. He emphasize the importance of factoring in security and DR concerns when modernizing, and highlight funding opportunities from big providers like AWS and Microsoft. Tune in to this podcast to learn how to make cloud technology work for your business while saving money.

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About John Gray

John is the CTO at InterVision, a position he has held for over 25 years. He has extensive experience in IT innovation, software engineering, and business leadership. John founded Infiniti Consulting more than 10 years ago, a successful IT consulting and system integration company that became a leader in cloud adoption.

John’s primary focus is on utilizing technology effectively to drive positive business outcomes. He is considered a thought leader in cloud technology and IT architecture. He enjoys assisting organizations in solving complex business challenges and providing technical solutions that lead to successful innovation.

 

Episode Transcript

[00:00:39]: Setting the Stage for our conversation

[00:02:10]: How did the myth: the cloud is too expensive, come to be?

[00:05:24]: John Gray’s experience in fighting the fires of run-away costs

[00:11:26]: Use Case: CIO of a Healthcare Organization

[00:18:09]: Use Case: Founder of an Early-Stage Start-up

[00:24:19]: Use Case: VP of Technology Mid-Enterprise with Hybrid Architecture

[00:29:50]: John, Bust that Myth!

[00:32:02]: Thank you, and Closing

 

 

Episode Transcript

John Gray [00:00:00]:

How can you factor all these things into a modernization plan so you come out with improved performance, improved security, cost savings? And where can you make improvements that will bring you the biggest bang for your buck?

Voice Over – Ben Miller [00:00:21]:

Technology is transforming how we think, how we lead, and how we win. From InterVision, this is Status Go, the show helping IT leaders move beyond the status quo, master their craft, and propel their IT vision.

Jeff Ton [00:00:39]:

Welcome to Status Go. I’m your host, Jeff Ton. Before we get into our episode today, I have a favor to ask of you. If you enjoy the Status Go podcast, whether you are a frequent listener or this is your first time joining us, tell a friend, send them a link, or post on social media. Let others know about us. We would really appreciate it. With that, let’s jump into the episode.

 

Welcome back to our continuing series, Myth Busters: Cloud, Security, and Innovation. Like the much more famous MythBusters TV show, we’re going to dive into several myths, and through interviews, case studies, data, and of course, podcasts, we’re going to bust that myth. As you know, this month, we are debunking the myth that the cloud is too expensive. We’ve heard from Braden Pitts of MJ Insurance. We’ve heard from Nick Lumsden of TenacityAI. And today, we’re going to talk with InterVision’s own John Gray. John is our chief product officer. He’s been involved with the cloud back when the cloud was barely a whisper of cirrus making its way across the sky of our tech lexicon. Who better to help us bust that myth?

 

So, John, welcome back to Status Go.

John Gray [00:02:07]:

Thanks, Jeff. It’s great to be here again.

Jeff Ton [00:02:10]:

Well, you have been a frequent guest, and you’ve also been a host here on Status Go. So, we’re going to skip the typical, “hey, share a little bit about your journey,” and we’re going to dive right in.

 

John, let’s unpack this myth. You’ve been involved in cloud technology since the early days. Where did this myth that the cloud is too expensive come from? What started this whole thing?

John Gray [00:02:37]:

Well, I mean, the cloud can be…the cloud done wrong can be expensive. Like any form of technology, if executed poorly, it can be expensive, and it doesn’t enable your business. If you step back and think about it, the whole purpose of technology, whether it’s cloud or on-premises or anything, is to make life better, right? Tools enable things, not constrain, but so often, we find that technology is constraining businesses, right?

 

And what’s happened with the cloud in some cases is a lot of the discipline that people had around setting up data centers, setting up servers, working methodically through the different disciplines have been not executed. The old-style way of doing things was, at times, slow and laborious. In the cloud, you can get in there, and you can turn stuff on and turn it up overnight, and it’s great, but you can turn a whole bunch of things on that you forget about, or you can execute it very poorly. You can replicate your on-prem architecture in the cloud, and often that is not the right way to do it. So, there’s a whole bunch of ways to do the cloud wrong, which cost you money in the long term.

Jeff Ton [00:04:06]:

So, it’s almost too easy, right? We made it too easy on ourselves…to deploy this technology.

John Gray [00:04:17]:

Certainly, that’s one way of looking at it. We hear a lot about shadow IT and things like that, where often in large organizations, you’ve got decentralized departments focused on their own thing. That works well for the business for a lot of reasons. Over the decades, Jeff, both you and I have seen the pendulum swing between centralized IT and decentralized and back and forth, and there’s pros and cons to both, right?

 

And so, you can implement things extremely quickly in the cloud great. It gets you off and going. If you then have the discipline to kind of stick with it and look at the costs and make improvements, you don’t have to get it all right initially. Right? But you also don’t want to forget it. Right? So, there’s lots of ways to go about it where you can achieve the agility and the things you want for your business and not overspend in the long run. But you need to use some of the disciplines that we’ve always used in IT in the right ways.

Jeff Ton [00:05:24]:

Well, I know from our conversations, John, you’ve been involved in some horror stories about runaway costs where you’ve been called in, you and your team have been called in to try to cap the geyser, if you will. Can you share a couple of things that you’ve done, or your team has done when you’ve brought in, in that case, to try to get things back under control a bit?

John Gray [00:05:52]:

Yeah, I mean, a couple of examples come to mind. Both of them came at me in this very similar time frame a couple of years ago. One was a shipping company that was extensively using DB2, IBM’s relational database. And their business was growing very fast. They had a sudden sort of expansion, and they were just massively constrained by the IO on their database, and it was really hurting them. So, they took advantage of the cloud, got things up and running in the cloud on servers, got DB2 installed, got everything running and performing well, and got them through that. And then three or four months later, when the CFO got to see the bills of what they had in the cloud, they’re like, “Whoa, what the heck?” And that’s kind of when we got the call, right? Because their guys had implemented DB2 in the same way they’d implemented it on-prem, got them through the period of time that they needed to stabilize their business, taken advantage of the new contracts they’d won, but they were just desperate for help. They didn’t know the cloud, they were really frightened to make any changes because things were working right, their business was humming along, but the costs were very high.

 

So, we got some of our cloud engineers in there, really sort of understood their architecture, and we made some initial changes within a day or two that immediately sort of saved them some pretty big chunks of money…shut down certain things at certain times of the day, took advantage of some caching and things like that and then got in there with them and looked more closely at the application architecture and made a few modernization changes with them to their application. So, it could really start to take advantage of some of the Cloud-native aspects of things like RDS and whatever in the Cloud and sort of incrementally got them to a much better place where they’re now spinning up test environments and shutting them down when they need to, rather than having big test environments running all the time. And really, they’ve sort of learned, and we put a bunch of automation scripts in place for them that they’re leveraging. I think our team continues to work with them, but that was one example.

 

In a similar sort of time frame, we had a company come to us who was really pushing the limits, bleeding edge on AWS’s version of Hadoop, and their bills were staggering, the money they were spending, but also their business was phenomenal and what they had done was really push the limits of AWS’s implementation of Hadoop. As you will see with some of the cloud services that come out, they’re not always fully formed with the latest things that are released, and not everything works as described on the box. And our engineers were able to get in there and figure out, working closely with the AWS team, what was going on and what that particular client was doing that was causing, basically, things to run so hot and not scale back down as it was supposed to.

 

So that was an example of our ability as a company, as an Amazon Premier partner. We had great leverage into getting to the people that have actually implemented the software, and it was kind of an edge case that this customer had pushed the limits and initially, it was great for them, but then they were just seeing things that was kind of beyond their experience. They’ve done very well, super bright people, they’re scientists who were using that sort of software but kind of run out of their own expertise, right? And they couldn’t shut it down because they were getting what they needed from a business standpoint. And we were again able to make some changes pretty quickly to get things under control, and then sort of once you take a bit of a pause, we’re able to then work with them to get into a solid architecture and get them connected directly up with the right people at Amazon who help them further.

Jeff Ton [00:11:11]:

Brilliant people that needed help. Absolutely, yeah.

John Gray [00:11:16]:

I mean, the people using it were phenomenal at what they were doing. In both of those cases, they use things well, right? But sort of then ran into trouble.

Jeff Ton [00:11:26]:

I think that’s part of it, right, is that many times we’re afraid to ask for help, afraid to admit that we don’t know something. But a lot of this is outside of our…especially those of us that were born on-premises, right. That’s how we came up through the ranks. This cloud can be mysterious for us.

 

I’ve got some hypothetical use-cases. I’d like to do a little bit of role-playing here, John, if you don’t mind. So, I’m going to place you in a role and just ask you a question about how you would handle that.

 

So, in this first one, you’re the CIO. The chief information officer, mid-Enterprise Organization. Let’s say the company is in healthcare. In your application portfolio, you have a couple of SaaS applications. However, most of your apps are server-based and run in your data center. You think you want to take advantage of the cloud, but you have heard these horror stories about costs getting out of control. What do you do to ensure that you don’t become one of those stories?

John Gray [00:12:42]:

My thinking there is you bring in a skilled partner, like an InterVision. Obviously, I’m going to favor us, but bring in somebody who’s really got experience to do an assessment in some shape or form of what the workloads are that you’ve got on-prem, the applications, and understand how they’re supporting your business. Really, as a team with the vendor you bring in, really sort of look at the big picture of how your technology is supporting your business. Right. Look at the areas where you may be wanting to make changes and areas where you don’t. And understand your costs today, where you’ve got money being spent on servers, money being spent on people a lot of the time, there’s a lot of money being spent on support staff. Right. So really understand your current costs and then sort of look to the areas where you may have a lot technical debt, perhaps. Where can you make improvements that will bring you the biggest bang for your buck, get you to your business objectives. Right.

 

This is not changing technology for technology’s sake. Right. You’re looking to improve things. Are you concerned about security, cybersecurity? Everybody is, right? Are you concerned about DR? Do you have that taken care of? How can you factor all these things into a modernization plan, essentially, and leverage the benefits of the cloud to do that? So, you come out with improved performance, improved security, cost savings. And that journey, there is probably a multi-phased project so that you move in a safe fashion right, from your current environment and situation into a phased-in approach to a new environment, and it’s not a one-time event, Jeff.

 

It’s an ongoing initiative generally. Right. And you want to sort of chop it up into pieces that fit with the rhythm of your business. There are certain times of year when you absolutely do not want to be making changes. Healthcare, I think, of open enrollment. You probably don’t want to be making any changes to anything around that time of year if you’re that type of company. So those are the sort of things spend the time with a partner to have them understand your business, your technology, what drives you as an organization, and how you need to innovate with your clients to really get ahead. What are your goals? Make sure those are conveyed and understood and built-in. And you understand how you’re going to potentially…if you’ve got massive SQL Server costs and licensing costs, which we often see, can you get that handled first to save some money that would fund a project? Can you take advantage of the funding coming from the major hyperscalers, from AWS, Microsoft, they will fund a lot of this work.

Jeff Ton [00:16:24]:

Absolutely.

John Gray [00:16:25]:

And we are experts in getting that funding for organizations. But really best is we need to understand your business, and it shouldn’t just again be a technology change for the sake of it. That can certainly be a good thing. It’s a plan.

Jeff Ton [00:16:47]:

Well, that hearkens back to you and I did an episode…gosh, it might be two years ago now. Time kind of flies by…on cloud first. That doesn’t mean you’re going big bang, right? You’re going to map it out and move slowly. And then the other piece that you talked about there is – talk to the cloud companies and find out what funding is available. Braden Pitts of MJ Insurance mentioned that on the episode that we ran a couple of weeks ago.

 

Now John, we’re going to pause right there, and we’re going to listen to an ad from InterVision Systems. A word from InterVision Systems. You mentioned our company a couple of minutes ago, and want to play this because, as listeners know, InterVision is the publisher of the Status Go podcast.

Voice Over – Ben Miller [00:17:48]:

Unlock the Power of More. With InterVision Systems, we provide the cutting-edge technology and expert guidance you need to take your business to the next level. Don’t settle for less. Choose InterVision Systems and discover what’s possible. Contact us now to learn more.

Jeff Ton [00:18:09]:

And if you do want to learn more, visit InterVision.com/myths to learn more about the myths we have been busting in this series and some about the myths that we’re going to be addressing in months to come.

 

Right now, we’re talking with John Gray. John is the Chief Product Officer of InterVision, and I’m having him do a little role-playing. We’re talking different roles, different scenarios, and how he would approach the cloud to make sure that costs are maintained in an appropriate way and to bust that myth that the cloud is too expensive.

 

So, another scenario that I’d like to explore with you, John, I know it’s one you can relate to. You’ve been involved in early-stage startups in your career. So now you’re involved in one, you have no intention of leveraging on-premises servers. What things do you need to consider to make sure that you keep costs under control as you launch the startup and start to grow the startup?

John Gray [00:19:22]:

Yeah, great question, and yes, I’ve been involved in startups. I’m still part owner of a company that we started that was cloud-based. That’s going very well, and using that as an example, we did not pay any infrastructure costs in the first twelve months because we took advantage of actually Amazon’s free tier. There is also funding available from Amazon and Microsoft for startups that will then, once you get beyond the free stuff, will really reduce the cost for you. And if you, from the get-go, have the discipline to use automation and engineering. If you’ve got people or you have a partner who can do infrastructure-as-code and things and shut environments down and use serverless and be very much on the leading edge of cloud-native, your costs can be really minuscule.

 

But all of that sounds exciting. There’s a sort of old-school discipline that you need in some shape or form in the company, though, and that is governance of how you’re leveraging the technology that you’re leveraging. Right? So, you need to figure out how you’re going to control it. So, as you…as a company start to expand and be successful and start to consume more technology, who’s kind of overseeing that? How are you reporting on it? Are you following FinOps financial operations, sort of best practices? Do you have budgeting alerts? Set up things like automation, automation, automation, right?

 

Things that will tip you off. If things are suddenly spiraling, and costs are going up when you didn’t expect them, right? So, you can take your eye off it and then periodically leverage others to come in and take a look at what you’re doing and can, well, architecture reviews, those kinds of things. Look for ways to improve the technology. Every year is improving and becoming more and more cost-effective.

 

Look to the latest services that are available, the serverless, you know, the various different ways the cloud is, is changing and evolving, and it’s becoming less and less expensive if you use it right. But don’t get so caught up in that you’re changing stuff every day because you got to get on and build your business. Sort of set a cadence.

 

And again, I would highly recommend bringing in a partner who is doing this stuff all day, every day. And to some degree in life, you do get what you pay for. So, get a partner that’s good and spend a little money because it will save you money. We offer cost optimization services where we will, in certain situations, guarantee that what we do for you will pay more than pay for itself. Right. And then, we recommend that you take those savings and further do refactoring and automation. But that doesn’t apply to a company that’s just starting out.

Jeff Ton [00:23:03]:

Just starting, yeah.

John Gray [00:23:08]:

Recognize that you’re going to fail at some things. Don’t be afraid to try things. Pull in the cloud companies and other folks and see what you can get for very little. Use the partners who know how to do that. Become a case study for them. If we do this for you, can you help us with some free consulting, and you’ll find.

Jeff Ton [00:23:41]:

You got some leverage?

John Gray [00:23:43]:

Yeah, you do. If you’re in an exciting area of business a lot of times these days, I mean, it used to be data processing, and then IT was separate from the main part of a company. Right. Whereas technology, fully digitalized companies, IT is completely wrapped into what you do. So, it’s no longer something that you’ve got people off in a different segment of your company.

Jeff Ton [00:24:16]:

It is part of the business.

John Gray [00:24:17]:

It’s part of the business.

Jeff Ton [00:24:19]:

Well, and you raise a couple of great points in there, John. One is if you’re in this startup scenario that we’re going through this situation, take advantage of the free tier for as long as it makes sense for you to do so. And then the other thing that I think you mentioned that really want to emphasize is – take the time to put your governance in place. You’re a founder, or you’re an early employee in a startup. You’re excited about the product or service that you’re building, and you don’t want to slow down. But sometimes, you have to slow down to put those governance pieces in place so that you don’t have to pay the piper later on.

 

Well, let’s try one more scenario, John. Now you’re the vice president of technology for a company. You have a hybrid architecture with a mixture of On-Prem, SaaS, and cloud-based applications. To further complicate things. You have a multi-cloud architecture. How do you keep costs in check in that environment?

John Gray [00:25:31]:

Yeah, I mean, I think that’s where most companies find themselves at this point, right? Multi-cloud, because you may be using one cloud, one hyperscaler for your main applications, another one for analytics, another one for your Security and Active Directory, those kinds of things. And you’ve got things on-prem, you’ve got SaaS, because SaaS is a good way to go for certain things, where it’s cookie cutter for your needs. How do you keep your costs in check? You need to monitor them. Right. Fundamental.

 

We’ve got a FinOps – financial operations service that we provide to customers, and it’s very cost-effective for them. And we look at not just cloud, we can look at your networking costs. Now, you’ve grown in growing into a multi-location. Should you be moving to SDWAN? Should you be considering as-a-service version of things? Are your needs somewhat unique or customized in certain areas? So, it’s really sort of ongoing discipline of having a cadence to look at things weekly, monthly, quarterly. It’s easier if you’ve got one vendor that you’re working with who provides that for you, right?

 

And you’ve got budgeting and alerting, and things set up automatically, so you know that you’re not going to go too far out of whack. Or if things start to escalate beyond what they were last month, why are you suddenly spending more? Well, perhaps you’re an education organization, and everybody’s signing up for class, and yeah, we would expect it this month. Yes. So, use the tools, use predictive AI, predictive analytics, and things like that to sort of run models and to identify improvements for you and really start to become a data-driven organization. So that you have the data that tells you where your money is being spent, you can see how much a particular business transaction is costing you. If you’re selling sneakers, how much does it cost for each one? If you’ve got a marketing campaign going, get the metrics coming out of that. Your call center, contact center, omnichannel, really, where you can instrument your it’s kind of an old school term again, but if you’re instrumenting your software and your infrastructure and things, and you’ve got data coming off of it that you can then track in analytics and KPIs.

 

And there’s so much now with the cloud versions of the BI tools that you can do so quickly into Dashboards you can be looking at, and that can be proactively alerting you and tracking and do trailing twelve-month analysis on certain key indicators so you can see if you’re getting better or worse. Really understand where your money is going, where it’s variable, where it’s fixed, and put together a one-year, two-year, three-year plan for where you’re going to spend money going forward to refactor. Because technology continutes to change, right. It’s not implement it, get it done. Now we don’t have to think about.

Jeff Ton [00:29:41]:

It is because the clouds are adding more and more services all the time. There may be other things that you can take advantage of.

John Gray [00:29:49]:

Exactly.

Jeff Ton [00:29:50]:

So, John, we’re here to bust the myth that the cloud is too expensive. What would you say to a CIO or an IT director that told you, “John, I’m not moving to the cloud because it is too expensive.” How do you respond to that?

John Gray [00:30:09]:

Well, I’d say, well, how do you know that? If somebody’s got the information? Look, I’ve got this very customized factory that’s got robotics in it, and it’s massively sensitive to network latency, and there’s certain scenarios that edge cases work. Okay, yeah, no, you’re right. The cloud is not going to be huge for you in that there’s probably data analytics and things that can be done in the cloud for you. But know why? Right? Because I don’t buy that as just a blanket statement for all the reasons and all the things I’ve just discussed. So, know where your money is going and how it supports your business. And if cloud is just this cloud infrastructure, that is just technology. But there’s increasingly a whole bunch of higher-level services in the cloud, right, that are not infrastructure…they’re AI…they’re many things as-a-service, right? Databases-as-a-service. So, when you say the cloud is too expensive, that’s an increasingly large set of things, right, including software-as-a-service. I mean, that is cloud. Most of those companies, all of them are running in the hyperscaler. If the right answer is to go to software-as-a-service, you’re using Cloud.

Jeff Ton [00:31:41]:

That’s right.

John Gray [00:31:42]:

Somebody else is doing it for you. Have somebody verify that for you. Challenge them. Challenge a company like ours. Say, “hey, we’re not going to the cloud because it’s going to be too expensive. And here’s why we believe that. Show us why that’s not the case.”

Jeff Ton [00:32:02]:

Not the case. Yeah, I love that. That reminds me of the episode we had with Sam Fouladgar several weeks ago. He’s an account executive. He’s in business development for InterVision, and his message was – challenge him. Right? As a prospect. Have him show you. I love that.

 

Well, John, we are out of time, my friend, and I want to thank you for carving out time to chat with us today and helping us to bust this myth that the cloud is too expensive. So, thank you, sir.

John Gray [00:32:42]:

Well, pleasure, Jeff. Thank you for having me.

Jeff Ton [00:32:46]:

There you have it, folks, myth busted! The cloud is an excellent option. And if you do it right and you plan and put the parameters around it and the governance around it, it doesn’t have to be too expensive. In fact, you can save money leveraging the cloud, and you can obtain technologies that you may not be able to afford otherwise.

 

To learn more and dive deeper into these myths, visit InterVision.com/myths. To find the show notes and the interview transcript, go to InterVision.com/Status-Go. The show notes will provide links and contact information. And if you’re interested in continuing the discussion, look for The Status Go Podcast group on LinkedIn. This is Jeff Ton for John Gray, thank you very much for listening.

Voice Over – Ben Miller [00:33:46]:

You’ve been listening to the Status Go podcast. You can subscribe on iTunes or get more information at InterVision.com. If you’d like to contribute to the conversation, find InterVision on Facebook, LinkedIn, or Twitter. Thank you for listening. Until next time.