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There is no doubt that the cloud is one of the most significant platform shifts in the history of computing. Now, there is a growing awareness of the long-term cost implications of cloud. As the cost of cloud starts to contribute significantly to the total cost of revenue (COR) or cost of goods sold (COGS), some companies have taken the dramatic step of “repatriating” the majority of workloads (as in the example of Dropbox) or in other cases adopting a hybrid approach (as with CrowdStrike and Zscaler). Those who have done this have reported significant cost savings: In 2017, Dropbox detailed in its S-1 a whopping $75M in cumulative savings over the two years prior to IPO due to their infrastructure optimization overhaul, the majority of which entailed repatriating workloads from public cloud.
WHY IT MATTERS: this article explores the cost of cloud computing for large SaaS companies that rely on cloud computing to run and operate their business. The basic argument is that cloud computing is amputating Billions from the market value of those large organizations. It should be read by every software engineer in every corporation and the proposed solutions implemented rapidly.
This statement summarizes the post best: "For a new startup or a new project, the cloud is the obvious choice. And it is certainly worth paying even a moderate “flexibility tax” for the nimbleness the cloud provides. The problem is, for large companies — including startups as they reach scale — that tax equates to hundreds of billions of dollars of equity value in many cases… and is levied well after the companies have already, deeply committed themselves to the cloud (and are often too entrenched to extricate themselves)."