It’s not often we get a look at what businesses spend on cloud services at scale. But a recent Business Insider article gives us some insight from Lyft’s IPO disclosure. Lyft is a pioneering company, breaking new ground in providing ridesharing services, self-driving car systems, and exceptional customer experiences. The company has decided to invest in cloud services in a big way. It will pay Amazon Web Services (AWS) at least $300 million by the end of 2021 for cloud computing services.
And Lyft isn’t alone. Pinterest, as mentioned in their IPO disclosure (reported here by CNBC), will be spending at least $750 million over the next 6 years with AWS. Emerging companies, as well as established enterprises, are using public cloud services in a big way.
“Notably, Lyft said that if its usage of Amazon's cloud doesn't hit or exceed that $300 million threshold, it'll have to pay the difference,” the Business Insider article adds. This tells us that Lyft is probably getting cloud services in a smart way, using the AWS “reserve instance” structure as well as spot instances and other advantages. Companies can get AWS services on-demand, but if you can make a commitment – usually for 3 years – the cost goes down. Way down. You reserve more to save more.
For a company like Lyft or Pinterest, with fast and unpredictable growth, the cloud can be an excellent fit, delivering great flexibility. But making a commitment is an exercise in guesswork; who knows how much IT capacity Lyft will need on, say, April 25, 2020? Or Pinterest on October 3, 2021? And for Lyft, one hiccup or slow-performing app could mean 250 rides going over to the other guys.
This highlights the difficulty of gauging a minimum commitment, $300 million in Lyft’s case. If the company grows more than expected, maybe they’ll spend $350 million over 3 years. If not, they might use services worth $250 million – but they’re still on the hook for the full amount. On day one, it’s hard to know.
The right cloud mix at the right commitment
At HPE, we understand the tremendous potential of cloud, and not just for hypergrowth, sharing-economy companies like Lyft and Pinterest. That’s why we help companies move to the cloud every day – to public cloud, hosted cloud, cloud at a co-location, or cloud on-premises. We’re here to help businesses find their right mix of IT capacity, delivered from the place that best suits each workload.
HPE GreenLake delivers a cloud-like experience for on-premises workloads in a way that ties costs tightly to consumption based on actual metered use of IT resources, including compute, storage, VMs, containers, and networking. Similar to the public cloud, if you reserve more, you save more. But since we work with you to plan your capacity over time, you can grow your way towards your 3- to 5-year cost – without guesswork. And since you don’t pay up front, you don’t pay for what you may not use.
In addition, as we’ve worked with over 1,000 customers to implement public and private clouds, we’ve found many ways to optimize the cloud experience. Our acquisition of Cloud Technology Partners and RedPixie added a strong infusion of cloud-native IP. As an unbiased cloud service provider, we help companies choose the right cloud for their workloads, move to the cloud, and keep their cloud spend down with services for cost and usage visibility and control.
Lessons learned: As you step into the cloud at scale, costs can scale more. It’s better not to guess. Understand your options, analyze your situation carefully, and put your workloads where they are best suited. Get the most out of your cloud experience, but make sure you are continually monitoring and optimizing your costs. Modernize your IT operations. And most importantly, do what many enterprises are doing – get help from a partner with the right expertise, experience, and toolkit to get you there fast.
Check out this infographic to learn how HPE GreenLake helps you gain public cloud advantages while retaining on-premises control or visit http://www.hpe.com/greenlake
Related Articles:
- Blog article, by same author: "Soar into Hybrid Cloud with a Pay-as-You-Go, Infrastructure-as-Code Solution"
- Blog article, by same author: "The Numbers Are In! The Business Value of HPE GreenLake Flex Capacity"
- Blog article: "Your Best Hybrid Cloud Now: Find It Fast with HPE Right Mix Advisor"
Don_Randall
WW HPE Pointnext Marketing. Reach me at @donrrandall on Twitter.
