Boom! One more reason to focus on on premises computing

Cloud is overhyped. Yes, I am risking my reputation by sticking my neck out and claiming that cloud is overhyped.

This will become true as macroeconomic trends and “recession” take hold. If your real market is shrinking, how will AI “deliver benefits” there? For healthcare, on-premises computing offers better returns on investment. There is a clear benefit to keeping the hardware under your own control.

Big Tech under pressure from cost-conscious cloud customers | Financial Times

After seeing their cloud bills soar as they move larger parts of their computing on to the platforms run by companies such as Amazon, Microsoft and Google, he added, many customers are getting smarter at working out how to squeeze costs out of their cloud spending.

The pressure on growth comes as many large companies have faced sharply rising bills as they move more of their computing into the cloud. The chief technology officer of one large bank complained that the biggest cloud companies had not moved fast enough to reduce fixed charges for things such as storage and computing as the volume of business has soared, despite the greater efficiencies that come from operating at massive scale.

I have been trying to get hold of the metric that marries the “ROI” (Return on Investment) with the efficiency. What does efficiency mean? Faster? Better? Standardisation? It seems that managers don’t want efficient workers.

Vendor lock-ins are now “standard part of the deal”.

“Customers who lean in with AWS on larger, longer-term commitments tend to enjoy the best economics,” said Elizabeth Baker, vice-president of AWS global deal strategy and programs. “We don’t tell customers where to run their workloads nor does their choice of vendors factor into our pricing.”

Companies face high switching costs if they try to move their computing to a different cloud player, said Silver. “And then once you switch you get locked into a new provider and eventually have the same problem with them,” he added.

I have discovered this, much to my chagrin. I had signed up for Dropbox a long time back. While they offer excellent backup services, it restricts my choices for others. I can see similar variations playing out, for example, Samsung offering a tie-in with Microsoft to offer OneDrive with “discount”. It takes considerable effort to migrate your data out of Dropbox, even if they have end points. I am sticking with Dropbox because it offers significant value, even if they don’t have a decent application for Linux (my work system). Still, a valuable lesson learned. Vendor lock-ins are bad enough.

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