Cloud and costs: A new dawn for South African enterprises and business

Cloud and costs: A new dawn for South African enterprises and business

Despite the global trend towards adopting various cloud technologies such as cloud-native, public cloud, multi-cloud and hybrid cloud, South Africa has not followed suit. According to the Managing Director at Braintree, Heath Huxtable, while the worldwide public cloud end-user spending is projected to reach US$600 billion by the year’s end and a significant number of companies have embraced multi-cloud strategies, South African businesses have been reluctant to do so.

Managing Director at Braintree, Heath Huxtable

Public cloud end-user spend is anticipated to reach US$600 billion by the end of this year and around 92% of companies have invested in a multi-cloud strategy. A recent Google Cloud Brand Pulse Survey found that around 41% of cloud leaders are increasing their use of cloud-based services, Gartner found that more than 50% of companies will use cloud to accelerate business initiatives, and the 2022 State of DevOps report found that companies using cloud are 14% more likely to exceed performance goals.  And yet, despite the slurry of statistics that underscore the value of cloud, South African companies remain hesitant.

“This is not a case of  South Africa lagging behind, it’s more the perception of cost,” said Heath Huxtable, Managing Director at Braintree. “There is a view that the cloud will be expensive and so companies are hesitant to invest.”

It’s an understandable concern. Bill shock has become a common cloud problem as companies find their feet within virtual infrastructure. This is largely due to limited visibility into cloud spend and usage and one of the reasons FinOps has gained traction over the past few years. It also hasn’t helped the case for clouds.

“Companies need two things – visibility and numbers,” says Huxtable. “They want to know what their teams are buying, where the costs are coming in, and what fine print they need to be aware of. It’s a realistic task, especially in the current climate. The spend on cloud should align with the benefits promised and the costs estimated.”

Cloud can and will save the business money if it is managed correctly. It is not an enormous slice out of the budget that won’t recoup its value. As Huxtable points out, “You need to take a five-year view as this is the replacement cycle for infrastructure in an on-premises environment. Sure, cloud is a monthly subscription cost that can get you close to the original cost of your five-year investment, but it doesn’t involve the reinvestment element. You don’t need to repurchase the hardware, the software, the licenses – they’re always available in the cloud.”

Then there’s the cost of electricity, especially in the current climate with the cost of backup generators, diesel and solar to take into account. Running everything on-premises in a loadshedding environment is a significant cost that is alleviated by shifting workloads into the cloud. The thousands of Rands spent on maintaining operations are now solely focused on lights, connectivity and devices and it is a chunk of money saved in one cloudy swoop. 

“Companies also  need to take the total cost of ownership into account,” said Huxtable. “The cost of running technology within the business isn’t just the hardware and the infrastructure, it’s the people who manage those environments. The engineers and the specialists who make sure that the lights stay on – all of them. If the business moves to the cloud and their cloud partner does their job properly, then these costs are minimised if not mitigated completely. And the benefits of the shift to the cloud are felt almost immediately.”

A cloud partner that knows the ropes and the road to an optimised cloud investment will ensure that the process is seamless, the costs transparent, the infrastructure relevant and the people supported. Change management is as important as the cloud itself as people are resistant to change and their buy-in can make all the difference between a successful move to the cloud, or a bumpy ride.

“When we do business application replacements in the business, there’s around 25% staff turnover because people don’t like change. They’re concerned about security, their ability to do their job and the time they need to spend learning new systems. It’s understandable, so changing the perception of the South African business goes beyond the price tag, it’s about people,” Huxtable continued.

Effective change management coupled with a process of continuous learning will empower people to make the most of a cloud investment. Wed this to the optimisations and cost savings that cloud can introduce, and suddenly the business is more agile and productive. Cloud success is about realistic implementation within set budgets and measurement against key metrics to achieve a solid foundation from which the business can grow.

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