The Secret to Cloud

“The cloud” is something that is talked about often. It’s something that can increase the multiples for a portfolio company during their exit. It’s something on-prem software companies move to. It’s something that allows the most innovative companies in the world to be innovative. It’s also something many people don’t understand in the right way. Why it’s important, and what makes it so different.

Cloud is commoditized compute. But that doesn’t make it cheap. Cloud is manageable with API calls and code. But that doesn’t make it easy.

The advantage of cloud is flexibility, not cost. Massive cost savings can flow from flexibility but that comes from engineering, not the cloud vendor.

We’ve all heard the joke that the cloud is “just someone else’s data center”. Which is cute, but also untrue. Most companies are terrible at running infrastructure in data centers. Running infrastructure well in data centers is hard. The cloud is someone else’s data center like a Ferrari is just someone else’s Italian car.

Whether in a well run data center installation or running in the cloud, there is one main secret. In either environment, one should be able to take any server and destroy it. If you can get an exact replica of that server in place in a few minutes, then you’re doing cloud correctly.

Everything flows from that ability. Where data is stored. How the networking, containers, security, permissions, access control, resilience, etc. are all set up. If customers don’t notice and it’s trivial (we’re talking minutes here), then that also means that new storage paradigms (for cost savings), new services (for product innovation), and resilient infrastructure (for customer retention) are all easy for that company.

When cost saving, innovation, and delighting customers are easier to do, then below the line costs go down, and above the line numbers go up. The cloud vendor can’t make your engineering organization high performing, it can’t reduce your costs because it’s providing you a ton of value, but when companies can leverage the secret to cloud, they become constrained by their innovation and imagination, not by their execution.