Why Efficiency Should Be Part Of Your Acceptance Criteria For The Cloud

If you’re like most enterprises, your cloud bills are only going in one direction: up.

Worldwide end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022, according to the latest forecast from Gartner, Inc. This is higher than the 18.8% growth forecast for 2022.

“Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature…Yet, organizations can only spend what they have.” – Sid Nag, VP analyst at Gartner

Do you know how much money your organization “has” to invest in cloud computing? Or if the amount you are investing is worth the return? Most companies have a technology budget and know the costs to migrate their operations to the cloud. But once they get there, their budgeted monthly expense is usually too low, and they are surprised to learn the real operational costs to support their applications in the cloud long term.

Before any organization moves their operations to the cloud, they should assess their cloud readiness, including the expected cost and productivity benefits they hope to achieve and whether their chosen cloud provider can meet all of their requirements (Each cloud provider has a list of considerations, and each company should create their own based on their objectives for migration). Independent of whether a company chooses to house their operations in the cloud or on-premise, efficiency should be the second most important acceptance criterion following productivity. For an organization to be truly successful in the long term, they need to instrument and drive efficiency from the top down.

Uplevel your acceptance criteria to include efficiency re you going to keep on accepting inefficient applications and code without focusing on what it’s going to cost you this year and beyond?

Every system strives to be more efficient, whether that’s a family, school, city, business, corporation, or our society. Inefficiency breeds waste and no one likes waste. What if an application costs one thousand dollars to run, but only needs to cost one hundred dollars to get the same results?

To increase efficiency, we must reduce the resources each application process or code uses, thereby lessening the burden on the server where everything is running. If you’re not using the capacity, you don’t need it, at least for now. However, we need to shift focus to the bigger, long-term capacity plays at hand if we want to make a real impact on efficiency. And we need to define a measurement standard for efficiency across the industry and over time (FinOps for Data and Code are showing promise for doing just that).

Historically, technology teams have not been looking at the efficiency of code as a major driver in our application development processes. We need to change this by including efficiency as part of the acceptance criteria for the business. If we just continue to accept code that only meets the functional requirements, this will not be sustainable in the future. It needs to become table stakes that code is developed with a certain level of efficiency. If the code does not meet a certain standard you have established, it should be rejected before it is promoted into production and impacts your cloud and capacity in a material way.

We need to start to measure the efficiency of systems as a whole. This will help to reign in your cloud costs because a more efficient system needs less storage to process the same workload as an inefficient system. The design choices we make in terms of data modeling, coding, and processes all have lasting impacts on the bottom line, both from a resource perspective, but more importantly on the financials, as most applications are in use for 10 to 20 years. What is the Total Cost of Ownership (TCO) of that code long-term and how can this be influenced during the design process? See more about the Total Cost of Code for technology systems in my last blog.

More than your cloud bill is at stake

Efficiency as an acceptance criterion matters because your cloud bills are not going down and you will continue to be challenged to scale with lower budgets.Scoring efficiency starts within applications, but then must track up to the overall application, system, and someday, to the enterprise. Looking at the total cost of our systems from as early as when design decisions are made (the data model, code, and process design) through to the life of the application means looking not just at the financial costs to the overall system but eventually to the greater environment (This excerpt from my podcast, Tech(e)valuation, explains how this process could work for the Department of Defense, DoD), the largest employer in the world).

Another thing that will not go down unless you start pulling the reins in on efficiency is your carbon footprint.

One of Gartner’s Top 10 Strategic Tech Trends for 2023 is sustainability, which “traverses all of the strategic technology trends for 2023.” In a recent Gartner survey, CEOs reported that environmental and social changes are now a top three priority for investors, after profit and revenue. This means that executives must invest more in innovative solutions that are designed to address ESG demand to meet sustainability goals. To do this, organizations need a new sustainable technology framework that increases the energy and material efficiency of IT services…”

Incorporating efficiency as a standard measure is a cultural change within organizations that needs to take place now for the sake of our cloud bills as well as our sustainability responsibilities. How much attention to the efficiency of technology is being paid at your organization? Once you know the impacts of efficiency, this will have a tremendous impact on the way you approach developing code and applications going forward.