The Cloudcast

Repatriation and Cloud Cost Management

June 06, 2021 Cloudcast Media
The Cloudcast
Repatriation and Cloud Cost Management
Show Notes

While there are scenarios where public cloud is much less expensive than data centers, there are times when it’s much more expensive. Is repatriation a viable way to manage cloud costs? 

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SHOW NOTES:

ARTICLE QUOTES: 

Repatriation results in one-third to one-half the cost of running equivalent workloads in the cloud

You’re crazy if you don’t start in the cloud; you’re crazy if you stay on it.

infrastructure spend should be a first-class metric

THE CASE FOR REPATRIATION

  1. Cloud costs are a large % of Cost of Sales (often times 50-80%)
  2. Cloud providers operate on large margins (e.g. AWS at 30%)
  3. Repatriation could reduce costs 30-50% of existing cloud spend

THE REALITIES OF REPATRIATION

  1. The case in the article is primarily based on 25-40x valuation multiples for software companies. While every companies believes they are a software company today, not every company is getting 25-40x revenue multiple from the market.  
  2. All repatriation calculations begin with, “if you run a highly efficient data center”
  3. All repatriation calculations next involve, “assuming you have the talent to run a cloud”
  4. Repatriation is technical debt. How does your company typically handle that?
  5. Less than 100% repatriation creates multiple operational models (ops, billing, security, etc.)
  6. Most companies use a subset of the features in any given cloud.
  7. Can you create a financial situation in your data center that’s similar to the cloud?

 

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