Welcome to episode 4 of CoreStack's NextGen Cloud Governance podcast – CloudBrew. In this episode, CoreStack's VP of Enterprise Strategy, Robert Ford, shares the importance of NOT cutting cloud costs and risk compromising your future when faced with a budget squeeze. Instead, he encourages organizations to be bold and take a braver course of action by optimizing spend, investing in cloud services, and cutting down on all low-value activities.
Discover how our NextGen Cloud Governance platform brings together FinOps, SecOps, and CloudOps solutions so you can Cloud with Confidence.
[02:09] Don't simply just cut the cloud and risk your future – be bit bolder, be bit braver …
[02:53] Is cutting costs and optimizing spend, really that different …
[06:23] How the cloud is positioned within the organization has got to be important …
[09:14] Why kill/cut this golden goose which is cloud, laying these golden eggs of future …
Listen to Full Episode
Kaylee: Hello and welcome back to another episode of Cloud Brew. My name is Kaylee Raduenz and I am on the strategic alliances team here at CoreStack. Today's topic is don't kill the goose that lays the golden egg. Today we have Rob Ford to chat with us. Hey Rob and welcome back. Will you give us a quick intro on yourself and explain what we mean by don't kill the goose that lays that golden egg.
Rob: Absolutely. Thanks, Kaylee. I'll try. Hi, everybody. My name is Rob Ford and I'm the head of strategy here at CoreStack. Now when I talk about golden geese and golden eggs, what I'm basically saying is why are you killing or cutting the golden goose, which I say is cloud that's laying the golden eggs, which is your future. Now I could have said while on Earth you're thinking of cutting cloud spending when you know it fuels all things digital, you're up to now and it's going to be the force that propels you onwards. But it doesn't quite have the same bite, does it? So, I went with the goose, but let me just sort of set a bit of context here. Yes, I know economic headwinds are fierce and unpredictable and there's an abundance of caution. You know, that's the smart thing to exhibit at the moment. However, you have to ask yourself the question, is this the right time to cut back on the gas and put your digital engine in economy mode, or alternatively, shed all that excess weight and put your sort of digital machine in sport mode and leave the competition behind? The former, is just a simple reaction that's going to result in you delivering value to your customers slower, slower than before, slower than the competition. And I say slow. Slow enough that the game has already entered the last sort of two-minute warning and you're scrambling to score. Whereas the latter demands you take this sort of more affirmative action and, you know, stopping or slowing down all that low value activity stuff. And if I paraphrase, a friend of mine, sort of Mr. Elton John, you know, stopping always seems to be the hardest word, but stopping is what you have to do. You have to make room, you have to optimize. Everything to run at peak performance levels and focusing on what's most important to the business, which in this digital era is all are at delivering value faster. Faster than your competition, you know, and faster than you did before. So, when you're faced with a budget squeeze, don't simply just sort of cut the cloud and risk your future. Be a bit bolder, be a bit braver, take a bolder course of action, optimize everything like crazy, invest in the future which is cloud and stop doing all those low value activities which you know, I know, you know where they live and they probably live there for far too long. I'll stop and sort of say you know as Tim Cook from Apple sort of says you know we don't believe you can save your way to prosperity. We think you have to invest your way to it. So, I would say optimize, spend all up, make room, double down on cloud and make sure that sort of golden goose is adequately fed and cared for so that it produces many more super big golden eggs to secure your future going forward.
Kaylee: That's a very interesting perspective, Rob. But is cutting costs and optimizing spend really that different? Can you maybe go a little bit deeper on why you draw such a distinction between some of the examples and draw that contrast?
Rob: Absolutely, Kelly. I mean the way I look at this is, you know, whilst they're sort of considered two sides of the same coin, the car, the contrast between them is a stark one. You know, cutting or I say one of them is focused purely on bottom line impact and the other one is focused on bottom line impacts, top line impact and that overall margin impact. And in my, you know, humble opinion, whether you're facing economic headwinds or sort of riding an economic tailwind, optimizing spend, and that to me means investing in what matters most, is a matter of just ruthless relative prioritization more than available budget or some arbitrary target reduction. That said, let me try and bring that contrast alive for you with three polarities that I think everybody here will relate to. And the first one is sort of like you know, reaction versus action as the saying goes, you know and for most of us this isn't our first rodeo, you know. When it comes to tackling economic headwinds, we've done this before which probably goes to sort of some way why we react when faced with a challenge, we react the same way. And this immediate reactionary response, you know, probably just to appease the mandate coming down from above around cost is driven by instinct, habit and prior experience. And so cut is the place we go first. Whereas you know if you, if you take more affirmative action, you know that's going to demand surely you overcome those natural impulses. You make more deliberate choices. You have to involve more people and it sort of demands a greater conscious effort to take an action and for that sort of requires a very. Healthy dose of leadership, courage, so reaction and action. Two sides, the same coin. Very different. Though the contrast is stark. A second one I could use is sort of like emotional and rational, the natural desire to hastily move past a problem often leads to this more impulsive and emotional decision and without really considering the broader sort of system thinking, consequences, pressure to act fast, you know, complemented with that natural bias often results in people doing, you know, a simplistic answer which could be cut to a complex challenge, which is optimized spend and then often you get those unintended consequences. You know, a more rational response would be based on this thorough deeper understanding of the situation. You know, an appreciation of all the interdependences. And this discipline to follow a more objective sort of systematic and evidence-based process. So, I would say you know emotional and rational are two sides of the same coin. But the contrast is stark. And the last one I'll probably use this sort of short term, long term and note I sort of say I'll say longer term, short term and longer term because I think in the digital era we all agree long term is sort of a construct that's a bit defunct now but cutting costs to improve the bottom line maybe immediate. But it's also a false economy. You know, you put that golden goose on a strict diet and the golden eggs are going to be smaller and less numerous and all you've done is save a, you know, a bit of bird seed. So, I mean is that really what you need to do? The risk of taking those reactionary short term actions like cutting versus optimizing cloud can lead to those longer-term consequences that you really don't want to, you know, experience like missing out on things or, you know, you know, not being able to sustain what you've done or that dreaded sort of savers remorse that you may get. So, I'll stop there, Kaylee. But really, yes, two sides of the same coin contrast very stark in my opinion.
Kaylee: Ah, interesting. OK. Something that I've been wondering about as we've been talking how the cloud is positioned within the organization has got to be in point, right? Especially in the context of your comment earlier around more investment. Can you talk more about that?
Rob: Yes. And and, you know, for me, I mean optimizing spend is more than tweaking numbers. But for me it's sort of looking at spend through a relative priority lens of where to invest more, where to de-invest as much as it is as just looking at sort of general fiscal efficacy and spend efficacy. So that that's my broader definition of optimized spend and they're given the all roads digital lead to and from and ride on top of the cloud of all flavors from the data centre private all the way through to the edge that then how cloud is positioned in your organization is hugely impactful to what you do when you face economic headway. I mean if you see the cloud as just to this alternate modern infrastructure and merely try and you know you're using to merely try and improve the natural evolution of your business, then the sort of OpEx flexibility that everybody touts as a benefit that comes with cloud is going to manifest itself in an easy tactical reduction of spend and often done across clouds, you know, often done without really a genuine appreciation of the broader impact or the ecosystem dependences, you know and we know what the potential impacts of that could be. Yeah, I mean cloud spend is easy to cut. It's quick. It's simple, innit? It may make you look like some sort of corporate fiscal warrior hero in the short term. But the reality is the impact is you know if you cut cloud spend that's a percentage of your cloud budget, which is a percentage of the IT budget, which is a percentage of a bigger COGS number. And in reality, that's not material enough to change the trajectory of any company. So, as I said sort of simply cutting expense or cutting cloud is sort of this one-way race to the bottom. Whereas if you've positioned cloud in your business as this strategic organization wide initiative that fuels everything, you're doing digital, you know, and it's the force that's going to sort of propel your business onwards and upwards into the future. Cutting it is, is a super tough thing to do, doesn't make as much sense and optimizing it, you know through investment, what's important, de-investing, what's not yet, is the logical decision to make. Back to what Tim Cook said, you've got to invest your way to prosperity and part of that investment decision must include what you stop investing in a hard conversation to have but put the focus rightly on those sort of low value non-strategic stuff as a way to find the funding to invest on what matters most. And in this context, that's cloud. So really, bottom line, if you're going to optimize cloud spending, do it in a way that gives you a chance of impacting 100% of the top line revenue. Then you get the board's attention and then there's the golden goose is going to produce more giant eggs faster than ever before.
Kaylee: Love that. That's great insights. Thank you, rob. So, last but not least, any words of wisdom to our listeners before we end our session today?
Rob: Well, I mean back to the original premise of this sort of short podcast. I mean why kill you know cut this golden goose which is cloud laying these golden eggs your future when you know that cloud is fuelling all things digital, you're doing now and that you plan to do next. We will instinctively know it's sort of like the rocket fuel that's going to propel your business onwards and upwards. So, the answer to the rhetorical question is you just shouldn't. Of course, this is a time to optimize spend, build resilience, do everything possible, but you want to maintain speed and that strategic advantage because it's all about delivering value to customers faster. So, optimize, spend! That conversation speaks more to greater investment in what matters most, which is cloud. De-investing in low activities to make room, and then demonstrating world class ethic. See, in every other element of spend and governance, cloud is that Golden Goose again, from the data centre to the edge and everything in between. If you do cloud right, it's going to produce golden eggs that are your future. So please position cloud correctly. Invest in it as part of spend optimization. Govern it confidently. I will see you and your geese in the winner's enclosure very, very soon.
Kaylee: I love that. That's so great. Well, thanks, Rob and to our listeners for your time today. Please subscribe to hear more content. We're on Spotify, YouTube, iTunes and Audible. Until next time!