For more than a decade, IT departments have been quickly increasing their spending on cloud computing to hundreds of billions of dollars annually. That’s led some tech leaders, including Akamai Technologies chief technology officer Robert Blumofe, to rethink their cloud strategies.
“Our approach has evolved considerably, and in ways that are fairly consistent from what I hear from our customers, some of whom are Fortune 500 [companies],” says Blumofe.
Blumofe sees three major themes related to tweaking his approach to the cloud: the hunt for cost savings, new thinking on the design and architecture of cloud-based applications, and the emergence of generative artificial intelligence, which relies on the cloud's data storage to train and run large language models.
Cost savings has been a particularly big focus at Akamai, which helps customers with streaming and cybersecurity. Blumofe has been seeking relationships with alternative third-party software companies beyond the public cloud hyperscalers, such as Amazon Web Services, Microsoft Azure, and Google. He wants to free Akamai from vendor lock-in with the cloud giants, which often bundle their services with proprietary software.
Much of this pivot to disentangle software and cloud is from “Project Cirrus,” an initiative that Blumofe has led to migrate some application workloads to Akamai’s cloud hosting service Linode, which the company acquired for $900 million in 2022.
“We save a ton of money because we are just using the core infrastructure as a service that is much more reasonably priced,” says Blumofe. He estimates he has cut spending on public cloud providers by 40% in the first year of Project Cirrus.
Worldwide annual spending on public cloud services is projected to increase 21% to $723.4 billion in 2025, according to research firm Gartner. With so much money at play, there are plenty of opportunities for CIOs and CTOs to overspend.
“You really need to optimize the whole stack to be able to drive efficiency and performance,” says Ranjit Bawa, U.S. chief strategy and technology officer at consultancy Deloitte. Bawa advises clients to rethink their approach to every aspect of the cloud, including compute, storage, and even the physical data center facilities. Switching vendors, including to emerging cloud players, could help cut costs.
Jim Swanson, chief information officer at pharmaceutical giant Johnson & Johnson, says with cloud computing needs constantly rising, he leans on an internal operational framework known as FinOps, which brings together IT, finance, and business division leaders to align on how best to tap the cloud at an effective price.
“We're constantly looking at how we buy [cloud] at the best cost possible,” says Swanson
J&J’s multi-year cloud migration is still under way, with the company continuing to modernize systems that support functions like supply chain and finance. A disproportionate amount of workloads are with AWS, though Swanson has embraced a multi-cloud approach that lets him match the right cloud service with J&J's desired business outcomes, like when the company runs applications to help assist with simulations for orthopedic devices or develop new drugs.
“Given that we are a multi-sector company, and have such a big geographic footprint, you need optionality,” says Swanson.
Cybersecurity provider Palo Alto Networks says as more Fortune 500 companies increase their spending on cloud computing, there's also a corresponding fear of losing control.
“You are losing control,” says Nir Zuk, CTO and founder of Palo Alto. “However, the cloud offers an opportunity to be much more secure compared to traditional data centers.” Zuk says by moving away from legacy physical data centers, companies can take a fresh look at developing cloud architecture guidelines that can more securely store and run their data.
With more customers embracing a multi-cloud approach, Palo Alto’s pitch is that its cybersecurity offerings are built to run across all cloud environments seamlessly. “It makes their lives much, much easier,” says Zuk.
C3 AI, meanwhile, in November cemented a partnership with Microsoft that integrates some sales and marketing efforts between the two companies. Under the terms of the five-year deal, Microsoft’s sales team will be able to pitch around 130 of C3 AI’s software applications to joint customers. The sales team is incentivized by making commission on any sale of C3 AI’s offerings.
Thomas Siebel, CEO of C3 AI, says he considered multiple vendors, but that Microsoft’s expertise selling enterprise software aligned most neatly with C3 AI’s business priorities. The deal also makes Azure the preferred cloud provider for C3 AI, tightening a relationship that began in 2018.
“They made it very clear they wanted to go to business now, they wanted to go fast, and they wanted to go to business globally,” says Siebel.
John Kell
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