Price-war, cloud-portability & future of cloud
Assuming at one point-of-time, when maximum IT operations of most of business-entities would have moved on any of available cloud-platforms in the market, that would be a situation of stagnation. That time the rate of new customer onboarding will be extremely low and hence the new-revenue to cloud-providers would also be narrowed down. This is a situation when [price-war] by cloud-providers will enter into its [dirty-form] like we have already witnessed in the telecom-market. I consider this [price-war] situation is good for customers and this will also lead to the customer-expectation of [seamless [cloud-portability] without any business impact or luxury-switchover-time] i.e. he wishes everything gets completed just on one [magic-button-click]].
Hash tag : #cloudportability, #cloudpricewar, #onpremise, #oncloud, #costonpremvsoncloud, #cloudstandardization, #cloudagnostic #savecloudrecurringexpense
Sametime another debate has started because few customers started moving away from cloud-platforms mainly because of application complexity & heavy recurring expenses. Somewhere at the bottom of their heart, people feel that [overall on-cloud solution] might be expensive, but without any evidence and methodological approach. In my continuation of this article, I tried to explain the [Cost analysis : On-premise vs Public-cloud] methodologically and with data-points.
If I need to explain the most basic difference between [non-cloud & on-cloud] to a non-technical person, I will take an example from the realty sector. Just like in the realty sector, a flat or apartment is property without land and a house or villa is property with land. Sameway non-cloud (on-premise) has every asset under your ownership, which in case of on-cloud one pays only for the services used, no infra will be in your ownership if you terminate the subscription. This statement is over-simplified, but conceptually good for understanding.
I have tried to share maximum information with readers & audience of the open-world with complete honesty. At the same time, I also wanted to understand others’ perspectives about cloud’s futures. Because I feel a telecom-market like situation is yet to come in the cloud-market where we will see issues like customer retention & price-war/counter-offer by competitors.
Maybe I am overthinking, please do share your thoughts. That’s why I wrote two articles on following topics with complete details
- Price-war, cloud-portability & future of cloud
- Cost analysis : On-premise vs Public-cloud (with data-points)
- HLD – Migrate My Infrastructure (MMI) on magic-button-click (In-progress, will share soon)
- Future of cloud
Cloud computing is very old in the market, but the cloud computing boom began in 2010. Since then the cloud-market is continuously growing. Many of the organizations have already moved onto cloud or have some presence on cloud.
Assuming at one point-of-time, when maximum IT operations of most of business-entities would have moved on any of available cloud-platforms, that would be a situation of stagnation. That time the rate of new customer onboarding will be extremely low and hence the new-revenue to cloud-providers would also be very low. This is a situation when [price-war] by cloud-providers will enter into its [dirty-form] like we have already witnessed in the telecom-market. I consider this [price-war] situation good for customers and this will also lead to the customer-expectation of [seamless [cloud-portability] without any business impact or luxury-switchover-time] i.e. he wishes everything gets completed just on one [magic-button-click]].
If I need to define expectations for [seamless [cloud-portability] without any business impact & migration time], it would be as simple as we charge our laptop using powerpoint in residence or office, we just plugin or unplug the male connector of the charger. I foresee the feature of [cloud-portability] in cloud-market, same or very similar to [number-portability] in telecom-market. [cloud-portability] on one [magic-button-click] is a good wish of customers, which is very much possible to achieve as well. There would be many challenges under two categories a) willingness of cloud-providers b) technical feasibility. However, customers would always wish to [port-in] onto other cloud-platforms at better prices but cloud-providers itself would be the biggest hindrance for them. [donor-cloud-provider] most likely will have tendency not to support this migration to [recipient-cloud-provider] nor in absence of any [regulatory body] there is any compliance boundation on cloud-providers.
I have a little different perspective, I foresee a great opportunity of [application-standardization] or [capability-standardization] alongwith equal prospects of capable business-entities or individuals, otherwise whole world would be playing in the hands of 3 cloud-vendors only [Amazon AWS, Google GCP, Microsoft Azure], because of there monopoly, customers would not be able define any strategy with cloud-dependency. This is where all business-entities have tight coupling with one of cloud-vendors.
We all know that [cloud-vendor-lock-in] is one of the [architecture-&-design (A&D)] principles, but still [cloud-specific-services] are considered in the [application-architecture] e.g. AWS Cognito, AWS-Pinpoint, AWS-SNS, GCP Pubsub, Azure Queue etc. Sometimes customers themselves forced their [architect-teams] to opt-in all [cloud-specific-services] only or in reciprocation [architect-teams] somehow manages to get exception to safeguard themselves or due to other different reasons.
Post the exemption of [cloud-specific-services], another observation I found is that [adaptor-layer] is missing around these [cloud-specific-services], so that in future if a customer wants to change any [cloud-specific-services], they just make changes inside [adaptor-layer]. The most important point is that there is so much timeline pressure on implementation-team under which it is also not fair to expect these A&D principles i.e. avoid [cloud-vendor-lock-in] & have [adaptor-layer] in overall [application-architecture], in the end if decision-makers are convinced and well-informed then no need to get emotional with [architecture-&-design] principles & considerations.
But ignoring the A&D principle of [cloud-vendor-lock-in] & [adaptor-layer], what do customers lose? So well, they lose the opportunity of seamless [port-in] of their applications onto other cloud-platforms who are offering them a far better price.
While writing this article I tried to read both perspectives, one who wrote on [continuous cloud-growth & its projection] and others who wrote on [why customers are moving away from cloud-platform]. Please refer following market research links to know about various statistics of cloud computing,
- Cloud computing statistics by CloudZero
- Cloud computing statistics by Statista
- Rise of Companies Leaving the Cloud By Sameer Aghera
Cloud-portability & Price-war awaited in cloud market
Cloudification of legacy (on-premises) infrastructure is reaching a stagnancy level. At this juncture, customers have learned a lot about the benefits of hosting their applications on cloud-platforms. Few customers have learned a lot and started doubting about the original sales-pitch of [cost-saving] of having applications on cloud-platforms and they started rethinking of moving from their current cloud-platform to other providers or back to on-premises.
Few customers feel that cloudification is a kind of trap, which cloud-providers use to milk them continuously. This article is not to talk about money making by cloud-providers from customers, rather the article is to talk about expected [price-war] situations in future in the cloud market. Assuming 70%-80% customers have already migrated on any of the cloud-platforms available in the market, most of the customers would like to remain with their existing cloud-provider. This situation is going to bring a strategy of offering drastically non-competitive prices to attract customers on other cloud-platforms. This is the situation of [price-war], when one cloud-provider would want other cloud-provider’s customers on their cloud-platform.
Sales-executives of current cloud-providers will do detailed research on the cloud-investment being made by customers of their rival cloud-providers. After all calculations of proposed offer-cost including profit margin, Sales-executives will offer huge discounts to [port-out] customers from other cloud-provider’s platforms to their cloud-platform.
Shadows from telecom market history
[Price-war] & [Cloud-portability] are very much similar to what the world has already seen in the telecom market. 5-10 years back, when one telecom-operator used to slash their tariff drastically to attract the customer-base of other telecom-operators. This strategy was actually working well but gradually this strategy turned into price-war. But still there were many loyal subscribers, who remained loyal to their current telecom-operators like I am the 20 years old subscriber of my telecom-operator. This was the time when telecom-operators started thinking on quality-of-service and better features in their offering. Thanks to the government, who allowed the [number-portability] from one operator to another with a seamless process. Now was the time when customers became the KING and customers started porting their subscriptions to those operators who were suited to their needs of required features & expenses.
Standardization of cloud-service manufacturing
[Price-war] & [Cloud-portability] are the situations which are yet to come in the cloud market, sametime cloud-market is different from the telecom-market. End-users of the telecom-market are the citizens of the country and the telecom-market is well controlled by the government via regulatory bodies, while end-users of cloud-markets are business-entities & technical staff. I may be wrong but I don’t foresee the possibility of having regulatory-body in the cloud-market in the near or little far future. Even though in the absence of regulatory-body in the cloud-market, I foresee the situation of [Price-war] & [Cloud-portability]. Alternative of regulatory-body in the cloud-market could be [forum-for-architecture-&-design-principles-for-cloud-service] formed by group of [volunteer-architects], who will work on [standardization] of each [cloud-service] or defining the [adaptor-layer] for those cloud-services.
Secondly standard organization should create the empty interface layer for every service including accessible parameter names and relevant operation-names. Cloud-providers should implement those operations mandatorily. However, to be ahead in the market they can define additional operations as additional features. Standard organizations may introduce that additional operation into standards later or sooner.
Story of [ABC Enterprise] : Journey from AWS > GCP > Azure > AWS**
Let’s understand by one example, suppose : A small business-entity [ABC-Enterprise] has migrated all their IT operations on [AWS cloud-platform] and their monthly [recurring-cloud-charges] are nearly [100K USD per month], assuming GCP approaches to [ABC-Enterprise] and after doing all calculation, they make an offer for same [quality-of-service] on their platform with recurring of [80K per month] for next 5 years. [ABC-Enterprise] found this a lucrative offer and in the next one month they migrated from [AWS to GCP] cloud-platform.
Similarly Azure applied the same strategy on [ABC-Enterprise] to make an offer of [60K per month] for the same cloud-services and again in the next one month time, [ABC-Enterprise] migrated from [GCP to Azure] cloud-platform.
Now AWS again quickly reviews their pricing structure and makes an offer of [50K per month] to [ABC-Enterprise]. But now [ABC-Enterprise] has learned the challenges of frequent [cloud-portability], they took a pause and analyzed that over the past one-year their business has suffered a lot due to these frequent [cloud-portability] from one cloud-platform to another. [ABC-Enterprise] clearly put the condition that we can probably think of migrating onto [AWS cloud-platform], if you can guarantee to complete the entire platform-migration in a few hours at night and that too without hampering the business, customer-experience and single technical failure.
Obviously in the current cloud-platform’s setup, this is almost not feasible to ensure all these conditions simultaneously and AWS found itself helpless in closing the deal. Now one can see the importance of [standardization-of-cloud-service] & having [architecture-&-design -principles] while defining the [application-architecture].
(Note : this example is completely hypothetical just to explain the situation of [Price-war] & [Cloud-portability], this is not to prove that one cloud-platform is better than the other.)
About author
Profile : Rajesh Verma – Brief profile
Source : link for this article here
Series : S1 (Architecture & design)
Episode : S1E2 ([S1-A&D] MMI : Price-war, cloud-portability & future of cloud)
Author’s approach : Rajesh wants to share his learning & experience gained throughout his career from various sources. Author started the series on architectural topics and this article is one of the episodes in that attempt. Author feels that lots of information is available on various forums, but scattered here & there. Episodes in this series will be designed for most of the relevant topics in architecture-&-design, published gradually and organized in logical sequence. Principally episodes will have linkage with other episodes, so that readers can have proper connection among the topics and would be able to correlate with ongoing activities in their software life. Topics for example will be related to functional architecture, integration architecture, deployment architecture, microscopic view of mostly architecture-building-blocks (ABBs), security guidelines & approach to comply, performance KPIs & engineering, git branch & DevOps enabled automation strategy, NFR aspects (e.g. scalability, high-availability, stability, resiliency, etc.), commonly used architecture styles & design patterns, cloudification approaches, multi-tenancy approach, data migration, channel-cutover & rollout strategy, process standardization & simplification, greenfield rollout & brownfield transformation journeys, etc.
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