These experts say data management in the cloud is a necessary cost

Companies may be using the cloud to store more and more data, but we’re still drowning in it. Nobody knows this more than the people in charge of managing all that high-flying information. IT Brew spoke to three experts about how to cut costs, and why the cloud is expensive but ultimately worth the price of admission.

Everyone needs to do more with less. Anne Johnston, Capital One’s VP of cloud costs and engagement, spends a lot of time thinking about how speed and efficiency save money. “No matter what cloud provider you’re using, it is expensive, just like our data centers are expensive,” said Johnston. “If you don’t do [cloud infrastructure] right, the cloud can actually be more expensive than your data centers.”

Ben Schreiner, head of business innovation for SMBs at AWS, said he explains cost benefits through increases in efficiency: “I don’t think we do enough talking about the amount of time we save people, because time is a real cost, especially when you have a short staff or a small staff.”

“We were very used to developing code and deploying code in a data center, and that took time,” Johnston said. After transitioning to the cloud, Johnston was surprised at the time and cost savings. “We knew we could iterate. We knew we could go faster. But I don’t think I quite knew how fast we could iterate and how fast we could get features out.”

Many cloud platforms (including Azure,Google Cloud Storage, and AWS) offer companies tiered storage, which means a cloud provider charges less for data that’s accessed less frequently. It’s these kinds of features, Schreiner said, that “helps make smaller IT teams more effective, more efficient, able to do more with less, which everybody’s being asked to do right now.”

Kathy Kay, EVP and chief information officer at Principal Financial Group, led the 144-year-old financial services company’s shift to a hybrid cloud combination of AWS, Azure, and Google Cloud. “It’s not just because we’re moving a workload to the cloud that you get the savings,” Kay said. “It’s how we’re looking at it.” Principal analyzed all the legacy applications across the company and transitioned with a focus on how they would support any changes in the future.

“You can’t do that on-prem.” Johnston agrees that the cloud increases efficiency, but keeping data in data centers can also simply be untenable. Regarding Capital One’s reason for going all in on the cloud, Johnston explained, “The technology that we were using in the data center wasn’t allowing us to scale and wasn’t allowing us to be able to process the amount of data that we would need to process to meet those needs of our customers,” she said.

Kay agrees that leveraging the cloud is a necessity in her business, despite the expense. “When you think about the things we need to do to invest in data capabilities and analytics capabilities to improve customer experience, you can’t do that on-prem in a fast and affordable way,” she said.

The cost of experimenting. The three experts we spoke to also stressed the cloud’s ability to make room for trying new things, without incurring large costs. “[The cloud] provided an innovative platform for engineers to dream up these new features that our customers wanted but did not know that they wanted quite yet,” Johnston explained.

Schreiner called this “the cost of experimenting.” Before the cloud, businesses would have to make huge upfront investments in hardware and software just to do a proof of concept for a new feature. Now they can spin those up quickly and if something doesn’t work, they’re not left with the same kinds of sunk costs.

Kay said the most important piece of advice she has for anyone transitioning to the cloud is to recognize that it’s “an ongoing journey…I’m sure if we talk in a few months, I would have more insights and some aha moments, but as every CIO learns, once you start this, it is constant learning and pivoting and learning and pivoting.”