CIOs continue to resist Bezos Law at their own peril

Amazon CEO Jeff Bezos speaks at a news conference during the launch of Amazon's new tablets in New YorkI just returned from CIO Magazine’s CIO 100 Symposium and Awards where the “Top 100 CIO’s” were recognized for their achievements. I was shocked to find that even among this elite group of CIOs there were still a significant amount of CIOs who were resisting the cloud. They had a multitude of reasons or rationalizations as to why they were not embracing the cloud.

When asked what I was most proud of I said “getting out of the datacenter business” and returning the on-premise square footage to the business. Many heads nodded in agreement but there were also many CIOs who thought I was crazy. In discussing why they felt this way I came to the conclusion that many CIOs rose up thru the technical ranks and they derive their sense of self esteem and job security around their historical success of owning and understanding the technology. The cloud was perceived as just too risky for them to give up control.

Many CIOs rationalized they were in the cloud by stating they had a “private cloud” and when I pressed them on what they meant by that  they told me about how virtualized their datacenter was as if VMs somehow equaled cloud. I asked them what the attributes of a cloud was to them and they kept coming back to VMs. Virtual Machines are rapidly becoming yesterday’s news as Containers like Docker are becoming the most efficient way to run workloads. But even this misses the point entirely as I pointed out in a previous post “What does Bezos’ Law mean for CIOs?”

Then, today I read this article by Greg O’Connor, “Bezos’s law signals it’s time to ditch the data center” and it further laid out the case for embracing the public cloud and getting out of the datacenter business. In it Greg points out:

“Previously, I posited that the future of cloud computing is the availability of more computing power at a much lower cost. I termed this “Bezos’s law,” and defined it as the observation that, over the history of cloud, a unit of computing power price is reduced by 50 percent approximately every three years.”

“Now comes new cloud computing data based on Total Cost of Infrastructure (TCOI), proving cloud providers are innovating and reducing costs in areas beyond hardware. The result is a more compelling case for cloud as a far cheaper platform than a build-your-own data center. Further, the economic gap that favors the cloud provider platform will only widen over time.”

This seems so obvious to me but clearly many CIOs don’t get it. I stand by my statement that “Bezos Law is today’s version of Moore’s Law and CIOs who do not recognize this will be rapidly replaced.”

 

 

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About Michael Keithley
Digital Transformation CIO and Public Speaker. Previously, CIO at Creative Artists Agency

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