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As Cloudability Passes $250M In Cloud Cost, Cloud Management Comes Into Focus

By Mat Ellis on December 18, 2012

The consensus seems to be that Amazon will sell about a billion dollars of AWS this year. That’s a lot of cloud cost! It’s even more impressive to think of it as one million elastic IPs or one trillion S3 objects.

Here at Cloudability we recently passed $250,000,000 in total cloud bills. That means we’re tracking over a quarter of a billion dollars for our users. Annualized spending is a tad over $160M, and, given Amazon’s dominance in cloud spending today, we’re probably helping our customers to manage at least 10% of global cloud cost on AWS.

We spend a lot of time in this data figuring out usage and spending patterns, and what we are seeing is very interesting.

First, analyzing your cloud cost is quickly being seen as mandatory. We used to joke about the difficulty in training engineers to turn out the lights after they left the room, but increasingly we are seeing technical folks take this aspect of their job very seriously. The meme of “that stuff is for managers” is being replaced with “we’ve only got so much, let’s make the best of it.”

Secondly, we are seeing the focus move from total cloud cost to total cloud efficiency. Instead of thinking of your cloud like a data center costing $x per month, companies are beginning to measure cloud cost in $y per unit of productivity. If you make widgets, what’s the cost per widget? This makes sense, and it’s been a long time coming.

Thirdly, the market has moved from “why this cloud stuff is important” to eye-wateringly complex systems designed to define the true cost of cloud technology. The most advanced practitioners are already 6-12 months into a deep understanding of the IT economics of their business. These understandings will be translated into best practices as the market grows through 2013.

Finally, we’re seeing non-tech companies take the Cloud much more seriously. Companies in sectors as diverse as packaged goods, airlines, restaurants and manufacturers all have big plans for the Cloud in 2013. This is a major data point in the evolution of the cloud. It will be interesting to see how they like it and what changes they drive as a result.

We see all of this as affirmation that the cloud analytics market is maturing. It’s no longer a market focused solely on cloud cost, but one focused on the bigger relationship between spending and usage. This was driven home at the recent AWS re:Invent conference, where one of the hottest topics on the show floor was cloud management (as if hitting $50m in a month wasn’t enough, we saw $2m pass through our system on the first day of re:Invent). Enterprise IT departments are getting serious about managing the Cloud and not letting it manage them. They know that it’s not just how you measure it, but how you manage it that matters.

Now that the Cloud is getting traction outside of technology companies, we predict that AWS will surprise us next year. Maybe with revenue of One… Hundred… BILLION DOLLARS. Or sharks with frickin’ laser beams attached to their heads. Whatever it is, it’s going to be an interesting time to be on the Cloud.

Not part of the $250M club? Sign up for Cloudability today and start managing your cloud cost.

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