While AWS offers significant benefits compared to traditional on-premise infrastructure, its inherent elasticity and scalability tend to give rise to uncontrolled costs. AWS costs can be opaque and difficult to analyze — and without some system of identifying the source of costs and how to manage them — they can quickly undermine your profit margins. However, a number of tools have emerged over the past few years to help organizations manage and optimize their costs.

It’s cloud earnings week this week for AWS, GCP, and Azure, and I have already heard the pundits warming up the hot takes. Some are even asking if this could be the end of the cloud. My advice to you: Don’t be that person unless you enjoy being horribly wrong. No, I'm not saying that when AWS, Azure, and GCP report their growth that it's going to be anything different than what we expect.

The first person to coin the term “Artificial Intelligence” predicted that someday people would buy software as a utility. The year was 1961 and that person was Professor John McCarthy, a computer scientist at Stanford University. After Salesforce began selling software programs this way in the late-1990s, the good professor witnessed his prophecy come true for over 12 years before his passing in 2011. Yet this is only one aspect of computing in the cloud as we know it today.

If you have trouble understanding Microsoft Azure Storage pricing, you’re not alone. Azure Storage options can feel like a multi-layered maze of storage account types, tiers, pricing pages, specs — and then some. Yet, understanding your cloud cost drivers begins with looking at where your money goes. Only then can you tell if you are getting value for your money.

As we were planning “Cloud Atlas,” our primary goal was to talk with someone who was “in the room” during the genesis of the cloud. Allan Vermeulen, who worked for Amazon from 1999-2021, and who proposed Amazon Simple Storage Service (S3), became that source. Allan is a born engineer. He has always enjoyed building things — whether “out of bits and software or boards and lumber,” Allan takes pleasure in creating useful things.

A major problem led Amazon to introduce Cost Explorer and Cost and Usage Reports. Many Amazon Web Services (AWS) users were overspending on services they couldn't quite identify. Before the two cloud financial management tools, the AWS public cloud was like a buffet menu without prices. Engineers could use as many cloud resources as they could get away with (and then some), only to be hit with surprise bills at the end of the month or billing cycle.

YouTube. Netflix. Uber. Spotify. TikTok. You name it. You sign up and get your own account. Once you set it up however you want, you can access it from any internet-enabled device, including smartphones and smartwatches. In case your device breaks, is lost, or you switch to a new one, you can still access the account, as well as the settings and information it contained, from another device without having to recreate everything from scratch.

It’s almost impossible to create an optimized cloud system out of the gate and keep it running at a perfect balance over the long term. There’s almost always something that could benefit from some tweaks and adjustments. Cloud costs have a way of creeping up slowly while you’re not paying attention. And if you’re not careful, they can spiral out of control before you realize anything is happening.

Just about everything you interact with digitally is enabled by the cloud. Whether you’re doom-scrolling on Instagram, binge-watching on Netflix, ride-hailing on Uber, or downloading super-cool cloud podcasts (hint, hint) on Spotify, you’re using the cloud. But most people don’t have any idea what the cloud is, where it came from, or what we, as a species, spend on it.

For Amazon to survive, they needed the cloud. But they had to invent it — and creating the cloud meant overcoming obstacles fundamental to the nature of software development at the time.

An easy way to understand what the early cloud did is to think of it like a public utility. The same way buildings depend on a common set of utilities — gas, electricity, and water — software projects depend on a common set of services: compute, storage, and database. “Compute” refers to the power it takes to run the software.

Every time your company onboards a new client or releases a new product, your cloud bill will grow. In fact, it doesn’t take a large event at all to see a spike. Whenever your company changes direction even slightly, it can affect the bottom line. Add to that factors such as economic inflation and increased demand for high-speed, high-power cloud services, and it may seem like each month’s cloud bill is higher than it was before. If that’s the case for you, you’re not alone.