Am I The Only One Confused? What’s up with cloud, on-prem, containers, and monoliths in our IT Industry?

In our ever-evolving landscape of IT, I find myself increasingly confused. The IT market has always been about winners and losers, but our once relatively straightforward market has changed into a complex labyrinth of choices and challenges, leaving many of us in confusion. If you look at the IT market today, the big contradictions are cloud vs. on-premises and traditional, monolithic applications vs. modern, containerized applications. When I talk to colleagues, vendors, partners, and customers about this, I can’t help but be confused about the outcome. The messages from analysts, experts, and public customer cases are contradictory, to say the least. Are there any clear winners? If I were the CIO of an organization, would I know exactly which basket I would put my eggs in? I can’t help but wonder: Am I the only one confused?

The Paradox of Cloud Adoption

Cloud adoption is still growing at an unprecedented rate, with 94% of enterprises using a cloud service, according to a 2022 survey by Flexera. The promise of efficiency, scalability, and flexibility, particularly for new workloads, fuels this growth. Yet, a paradox emerges when we dive deeper. Hyperscalers often present Total Cost of Ownership (TCO) calculations promising savings of up to double-digit percentages if customers migrate to the cloud. However, the reality often contradicts these projections, with customers finding the costs of running in the cloud much higher than expected. This is causing a significant amount of confusion in the market.

According to an article by Sarah Wang and Martin Casado at Andreessen Horowitz, “$100M of annual public cloud spend can translate to roughly less than half that amount in all-in annual total cost of ownership (TCO)” (Wang & Casado, 2021). This suggests that repatriation, or moving workloads from the cloud back to on-premises data centers, can result in significant cost savings.

“You’re crazy if you don’t start in the cloud; you’re crazy if you stay on it.” This quote from the article suggests that companies need to optimize early, often, and sometimes outside the cloud, and that infrastructure spend should be a first-class metric.

Take Basecamp/Hey, for instance. In 2021, they decided to move their operations from the cloud back to on-premises servers. The reasons for this move were financial, as they found that the costs of running in the cloud were significantly higher than expected. This example shows that despite the promises of cloud computing, it may not always be the most cost-effective solution for every organization.

However, the decision to repatriate is also not a simple one and requires careful consideration of various factors, including the nature of the workloads, the organization’s IT capabilities, and the long-term strategic goals.

The Dilemma of On-Premises Life Cycle Management

While the cloud presents its own set of challenges, on-premises data centers are not without their own dilemmas. The cycle of updates, upgrades, patches, and migrations seems never-ending. The cost of managing this cycle has been increasing by 5% year on year, adding to the financial burden of organizations. In addition to these increasing costs, organizations are also grappling with the impact of inflation. This means that the real cost of IT operations is increasing even faster than the nominal 5% increase in Life Cycle Management (LCM) costs. This high inflation is putting more strain on IT budgets, making it even more challenging for organizations to manage their IT operations effectively.

So, organizations are looking at the public cloud for relief of these Life Cycle Management duties and ultimately lowering their TCO. But, as we just discussed, the reality is that the TCO will likely increase when you start to really scale in the cloud, which forces organizations to repatriate back to on-premises.

The Complexity of Containerization, Microservices, and Kubernetes

As if the cloud and on-premises dilemmas weren’t enough, the industry is pushing customers toward new technologies like containerization, microservices, and Kubernetes. These technologies promise to provide greater flexibility, scalability, and efficiency. However, these new platforms are complex. In fact, according to a 2021 survey by the Cloud Native Computing Foundation, 63% of IT professionals find Kubernetes challenging. Finding the right people with the necessary expertise to adopt these new technologies is a significant hurdle. And the Cloud Native Computing Foundation (CNCF) landscape is evolving rapidly, which makes it even more challenging to keep up with the pace of innovation. This also raises questions about the stability and reliability of various projects. Which open-source projects will find true momentum in the community and mature? Ultimately, building these platforms and creating ‘golden paths’ to production for developers is a complex and time-consuming task.

And just like we saw with on-premises and public cloud, there is no silver bullet when you look at traditional, monolithic application architectures and modern, microservices app architectures. A real-life example is Amazon Prime. They initially moved from a traditional application to a microservices architecture, only to find that the complexity and costs were higher than expected. As a result, they decided to move back to a monolithic application, reducing their costs by 90%. This example shows that while microservices and containerization offer many benefits, they may not always be the best solution for every organization.

The Way Forward?

So, what’s the solution? Clearly, there’s no one-size-fits-all answer. Each organization needs to evaluate its unique needs, capabilities, and resources critically. It’s crucial to look beyond the hype and make informed decisions based on the realities of the organization. The goal is not to chase the latest trends but to find solutions that truly serve business needs. Whether it’s on-premises, cloud, or a hybrid approach, the best solution is the one that aligns with the business strategy and delivers value to customers.

Organizations need to adopt a strategic approach to IT investment. This involves understanding the total cost of ownership of various IT solutions, including both direct and indirect costs. It also involves understanding the trade-offs between different solutions and choosing the one that provides the best value. In addition, organizations need to invest in skills and capabilities to manage the complexities of the modern IT landscape. This includes skills in areas like cloud management, containerization, and microservices architecture. It also includes capabilities in areas like DevOps and Platform Engineering, which are crucial for managing the life cycle of modern applications. Finally, organizations need to adopt a “customer-centric” approach to IT. This means understanding the needs and expectations of customers/the business and using this understanding to guide IT decisions. Whether it’s improving the user experience, enhancing security, or reducing costs, the ultimate goal of IT should be to deliver value to customers/the business.

As we move forward, let’s also remember to be humble, to admit when we’re confused, and always strive to learn and grow. After all, in the ever-evolving landscape of IT, the only constant is change, and no one has all the answers!

I would love to hear your thoughts on this topic. Are you also feeling confused by the current IT landscape? How is your organization navigating these challenges? Please share your thoughts and experiences on my Twitter @jeffreykusters. Let’s continue the conversation there!