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Talking Cloud Cost Economics with Senior Strategist Randy Kerns – Infrastructure Matters, Episode 16

Talking Cloud Cost Economics with Senior Strategist Randy Kerns - Infrastructure Matters, Episode 16

In this episode of Infrastructure Matters, guest host Randy Kerns, Senior Strategist with The Futurum Group, joins Krista Macomber for a discussion of recent news, upcoming shows, and how to most cost-effectively use cloud infrastructure based on deep economic analysis and engagements with IT practitioners.

Key highlights include:

  • The launch of Pure Protect DRaaS by Pure Storage and the solution’s value, including speeding time-to-recovery and reducing data loss following a ransomware attack.
  • A preview of upcoming shows that The Futurum Group will be attending, including NetApp Insight, Veeam Analyst Summit and Supercomputing Conference 2023.
  • A deep dive discussion into minimizing TCO and optimizing cost economics in the cloud.

You can watch the video of our conversation below, and be sure to visit our YouTube Channel and subscribe so you don’t miss an episode.

Listen to the audio here:

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this webcast. The author does not hold any equity positions with any company mentioned in this webcast.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.


Krista Macomber: Hello everyone and welcome to this episode of Infrastructure Matters. I am one of your regular hosts, Krista Macomber. My typical counterparts, Steven Dickens and Kimberly Bates are both traveling this week. So I have the pleasure of being joined by Randy Kerns, who is our senior strategist on the team here at The Futurum Group. Randy, thanks so much for hopping on today to join me.

Randy Kerns: Thanks. I enjoy it.

Krista Macomber: Awesome. Yeah, looking forward to it. Do you want to maybe give folks maybe kind of a quick intro in terms of some of the research you typically do and just some of the engagements that you typically have? I know you work very closely with our IT practitioner and end user clients, so I think folks would love to hear a little bit about that before we jump in.

Randy Kerns: Sure. I do a lot of work with our clients, like you talked about, a lot of that is done to keep current with what’s going on in their environment. And then I do a lot of work with vendors, and I can be very confident in talking to them and saying, “This is what’s happening in your customers and this is why.” And the why is a big part of it.

I was talking to you earlier, I just had an engagement with one of our very long-term clients that we do a lot of work with, and they are starting their planning for the next major acquisitions, and this is going to be in the storage area. It’s going to be probably somewhere between a hundred, 200 petabyte acquisitions. So it’s a big deal, and I’ve worked with them before on this, and so I gave them a talk about what to look for in technologies, what’s coming, and we talked a little bit about economics.

We have gone through this quite a bit with them previously and what’s important and doing some economic understanding and making decisions. Going through this with these clients, like I said, it’s very important from the standpoint that the projects we do around strategies for go to market, competitive issues with the vendors, I can speak from a knowledge base saying, “This is what’s happening today.” So it’s a lot of fun.

Krista Macomber: A hundred percent. It really kind of helps to ground us there. So a lot to dig into and I’m looking forward to it. So first off, Randy, what we typically do on the show is we spend a few minutes talking about some of the recent news, and I know that one item that you and I both actually had the opportunity to be pre-briefed on, and I wrote up a quick research note on it that we’ll link to the show notes, so that the listeners can access that. But this particular announcement was from Pure Storage and on an announcement that they had kind of introducing a disaster recovery as a service offering.

So I thought that that would be one interesting item to kick off the show and talk a little bit about because when we think about Pure Storage, of course typically they would be very much on the production side of things. They kind of have their roots in flash storage in particular. So the fact that they’re kind of moving into this DR space and specifically the service initially, what it’s going to do is it’s going to allow customers to fail over VMware environments from on-premises into a native AWS instance in the cloud.

And so really the value, I know that you and I talked a little bit about it, Randy, is primarily twofold. The first is that Pure is going to be handling pre-conversions and really streamlining those failover operations for customers. So when we think about, for example, the ability to recover quickly from a cyber attack, it has a lot of value from that standpoint. And then secondly, what’s very interesting is that because it uses VMware’s APIs for data protection, VADP, it actually supports from a source perspective for the storage. It’s not just limited to peer. It can support really any storage environment. So I know those were a couple of things that jumped out from the announcement from me, but Randy, I guess what other color might you add?

Randy Kerns: Well, a couple of things. You alluded to this. This is really kind of out of their swim lane. This is really a data protection type of solution, creating a disaster copy, not specific to storage, and not where Pure has offered products before. I was very surprised by this and the fact that they would do this and at least currently, this isn’t specific to, like you said, to Pure Storage, so very surprising. Not sure what the ultimate goal is here, but I would imagine it’s caused some trepidation with some of their partners that are the data protection software companies. So we’ll have to wait and see how that turns out. But again, very surprised there.

And the second one is, and I think this is really more in line with what the value prop is that Pure brings is the fact that even in the basic storage systems they’ve offered, they don’t have a long 20-year history with their products and their offerings, and so they would have been able to implement without a lot of the baggage that’s carried along over time. They’ve made their products very simple to use, very streamlined if you would, and it’s more difficult when you start or when you have a product existing trying to make it simpler. You still have all that code base and baggage and usage cases that you have to carry forward. They haven’t had to do that. So they’ve made their products easy to use.

This is also something then that if you think about it, what they’ve done with this DR as a service, it’s incredibly simple. The real value prop I see in here is that the setup is all very, you used the word streamlined. That’s a good terminology for it. It’s simple. And that just carries on with the way they’ve done things for all their development.

Krista Macomber: A hundred percent. Yeah, you bring up a couple of really important points, Randy. First off, I certainly agree in terms of how Pure is going to manage these relationships with backup software and kind of data protection vendors that it already partners with. I know that when we had a conversation with them, they really tried to make sure to articulate their use case being different than what we might see from a traditional backup in the operational recovery side. But I know I personally am seeing the lines start to blur between backup and disaster recovery, especially as we kind of think about ransomware and the need to not only maybe have some quickly available snapshots to recover from, but also in the case that those are compromised, the more colder if you will, kind of back up copies. So definitely agree on that.

And I think the context you bring up regarding the simplicity, that is very important.
And I would add, especially when we think about disaster recovery, because part of what has inhibited in the past in some cases, some customers from being able to get a true DR implementation is the complexity and the cost of having to buy, manage all of that separate infrastructure for DR. So if Pure can kind of come in and really streamline that, I think it really stands to make it more accessible. So definitely agree with you there.

Randy Kerns: It’s going to be interesting to see what the uptake is. I think initially it’s going to be current Pure customers if they go off the reservation, so to speak. If they go to non-Pure customers, that’s going to be very interesting to see that, see what happens there.

Krista Macomber: Absolutely. And separately, I’ve been thinking that as well when we think about, I know Pure has acquired Portworx and has the Portworx backup offering for Kubernetes, so it’s very similar. To your point, definitely expect initial uptake among Pure customers and we’ll see how much it ventures off. So definitely interesting.

So Randy, I know another thing that we wanted to touch on before we get to our bigger picture discussion topic for the day was the fact that we are here in almost mid-October already, so we’re kind of moving into full steam ahead for the fall trade shows and vendor events that as a team we typically do every year. I know there’s a couple that you and I are going to be at actually together. I think there’s maybe a couple of additional ones that you’re planning to go. So wanted to maybe kind of showcase some of those quickly. I know for me, one that’s kind of coming up in a couple weeks here actually is NetApp Insight, and from my perspective kind of being our point on data protection, I know it’s been interesting for me to kind of watch the evolutions that NetApp has made.

Similar to discussion we were just having about Pure Storage actually on kind of the data security, data protection front with capabilities like being able to identify anomalies in areas like encryption behavior, to identify that a ransomware attack has occurred, and help customers to be able to recover from those attacks.So I know that kind of division within NetApp is kind of their data services division. So that’s one area of the business that I’m keen to have some conversations with while at the show. But from your perspective, Randy, what maybe is top of mind as we get closer to that event?

Randy Kerns: Well, I think it’s early to talk about anomaly detection and security and all that. And we expect that now because it’s a hot topic. I’m actually interested in understanding a little bit about Blue XP and how that’s going to be used. I see that it’s broadening the data management capabilities, and I think that’s going to be instrumental in not only in managing more effectively, but also in processes like data recovery and understanding where your data is and how much you’re spending.

They’ve got a lot of capabilities there, including the ESG type things, monitoring power and stuff. I think it’s going to be very, very interesting to understand how they’re going to be messaging that, and then how they get customers to really effectively use it. So that’s a big part of it.
The other one is they always surprise me with some new things, and so that’s great, and you get to reconnect with a lot of people you’ve known for decades now, and they’re really good people. So that’s why I enjoy a lot of these places.

Krista Macomber: Oh my god, a hundred percent. The face-to-face, right, at trade shows you just-

Randy Kerns: Exactly.

Krista Macomber: Yeah, there’s no replacing it, for sure.
I know that another event I believe you and I both are going to be at it is, so we’re actually going to have the opportunity to attend a dedicated analyst summit with Veeam, and that is going to be a great show. What’s nice about these types of events is that we do tend to get a lot of executive time and access.

I know heading into that show for me, I know that on this show we spoke a couple of weeks ago about the acquisition of the CT4 team and the CS platform for backup as a service that Veeam made just a couple of weeks ago. So kind getting an update on that area and digging in a little bit more for me, I know it’s going to be top of mind heading into that. And just in general, understanding how Veeam is maybe continuing to evolve to support some of these new workloads, continue to bring more sophisticated capabilities for cyber resiliency, recovery from attacks of course is going to be top of mind for me. But what else from you, Randy, anything as we think about that particular event?

Randy Kerns: Well, there’s a lot for me. One of the things I do, we do these classes obviously, and I’ve got one coming up over in the Netherlands, and especially in Europe, I find a lot of clients I work with, they really want to do a temperature check on their vendors. They’re very concerned whether a vendor is going to continue to invest or whether a product’s going to become an orphan. They want know if a vendor may be becoming acquired. And that is a scary proposition for them and everything.

And like you said, the face time you get with the executives, you get a better barometer of what’s going on. And then I can reflect that with more confidence when I speak with their customers, our clients, and talk to them and say, “Yeah, here’s going on in this particular vendor.” In fact, I have a two-hour session where I do nothing but go through the vendor strategies and field questions, and the questions are amazing. They ask some esoteric details, they ask big picture and they want to know 10 years from now.

And I kind of look at them going, “I have no idea,” but the questions are interesting, and these events where you get to talk to the executives, give you a degree of confidence when are working with these people who are making critical decisions and huge investments, you can reflect, here’s what’s going on and they can get a little more confidence in it.

Krista Macomber: Yeah, a hundred percent. So it helps us because we get information and hopefully we can help, I would say both the vendors, and as you mentioned, the customers at the end of the day as well. So we give customers that candid feedback that’s very well-informed, and then from a vendor perspective, we can more accurately reflect them and their strategy to customers. So absolutely, it helps everybody at the end of the day.

Randy Kerns: Right. Yep. Another conference that’s upcoming, I’m not going this year, but Russ and Mitch are going, is a supercomputing conference, and it’s back in Denver this year, which is great. This is very important in that this is where the HPC world is incredibly active and you basically see everybody in the HPC world, which we deal a lot with. And being from Boulder, where we’ve got some big research labs with NCAR, NIST, NOAA, etcetera, a lot of the people that work in those have been my friends for decades outside of the work environment.

So it’s always a great thing to go visit. But we as our group, learn a lot of information there. And probably one of the more interesting things going on there is the HPC is morphing or adopting or whatever, a lot of the AI practicalities and futures, and they believe that they understand all that now in the HPC world. So it’s emerging of AI and HPC, so it’s very important for us to attend that.

Krista Macomber: I’m impressed that we’ve made it this far the episode without saying AI yet.

Randy Kerns: I’m sorry. You did tell me not to.

Krista Macomber: Right? No, but absolutely. I think definitely that’s an important topic for the supercomputing world, but I mean really just for all areas of the technology market, certainly.
All right, so any other kind of news related or anything else relating to shows, Randy, or do you think that kind of covers everything that’s top of mind for you right now?

Randy Kerns: Well, there’s a few more shows. I think you’re going to AWS Reinvent, and interesting things there. And there’s probably a couple others that I’ve forgotten, but they come up.

Krista Macomber: Yeah, and we’ll definitely be covering them on the show too, kind of as we all come fresh out of the shows with everything top of mind. All right, so Randy, I think with that, I know we’ve already had a little bit of discussion around data protection, data security, cloud, and you actually alluded to a particular engagement that you were having with a customer. So shifting gears just a little bit, I wanted to bring the conversation to a discussion around the economics of using the cloud and especially when it comes to using the cloud for data protection.

I think when the cloud initially emerged on the scene, for lack of a better way to put it, there was a lot of buzz and romance around, okay, it’s going to save everybody all kinds of money. But I think that we have really seen that that’s not the case, and that in fact, you need to use the cloud in an intelligent way in order to be able to reap those cost benefits.I know you and I have been working very closely on some work involving TCO for moving your data protection to the cloud. So with that kind of background, I guess, Randy, what might be some kind of general thoughts that you have on this topic and what you’re seeing?

Randy Kerns: Yeah, one of the ones that’s really interesting is a lot of people that move to the cloud think that they don’t need people managing their data anymore, or they associate the administrative people primarily with boxes and it’s really managing data, but the people that are doing administrative work, they’ve done it to themselves. They’re saying, “I’m managing this data platform, et cetera.” They really aren’t. They’re managing the information that’s on it.
And the assumption is for a lot of executives is they move to the cloud, they don’t need those people anymore.

So what we typically see is the amount of data in the public cloud balloons and the costs just go out of sight. And this is where we get into, okay, how many copies do you have there? Are people indiscriminately doing backups? Things like that. So the administration work actually gets even a little bit harder, and you really need to have somebody that’s paying attention to the bills that are coming in. And every cloud is different in the way they charge. It’s a pain in the butt trying to figure out where all that money’s being spent.

Krista Macomber: And then to that point too, that doesn’t even factor in the egress charges. So it’s great that you’re creating all these backups and that you’re storing them, but what happens when you actually need to recover? And that’s especially when the cost can kind of mount up. So that was one thing for me. Yeah.

Randy Kerns: One of the things we’re learning through this project we’ve been doing is there’s the discerning nature of how many copies and what media they’re on or what level they’re on and how often they’re referenced can dramatically affect the cost. And that is complicated to figure this all out.

Krista Macomber: It really is. And like you say, you need to have an understanding of the cost of the underlying kind of storage, what storage your copies are being stored on, how much you’re going to need to access them, how long they’re retained for. And also, one thing that I know we’ve talked about is that any data reduction, so deduplication, compression, that’s also where you can really start to have some cost benefits as well.

Randy Kerns: Correct. That’s a huge multiplier. If I can squeeze that down, I save a lot of money, but the issue is really is when I got to get it back, how fast can I get it for recovery? If I have to take a long time, then that’s not good, but if I keep it where I get it back quickly, maybe that’s costing me too much. It’s quite the economics exercise to figure all this out.

Krista Macomber: Yeah, it really is. And I know in our conversations, Randy, we’ve kind of broken it up into two general categories. So one being what we’ve described as these hard costs that really can be more specifically calculated. So things like we’ve mentioned, okay, the cost to store the data, the cost even for data egress, the cost for some kind of basic management tasks on a day-to-day basis for, as you mentioned, Randy, managing those data assets.

But the other side of it too is what we call soft costs. And what I think has been really interesting about that conversation is that as the issue of cyber attacks has become more prominent, and as cyber attacks have actually been the major disaster, if you will, that customers need to recover from versus what we’ve seen more traditionally, something like a natural disaster or something like that, that’s where what we call these soft costs really start to come into play and have a very material effect.

So I don’t know if you maybe want to talk about, I know we talked about some key assumptions that go in there. I can certainly jump in, but that was one thing that I think was interesting to me coming out of some of these conversations.

Randy Kerns: Yep. Basically, we’re talking about value here, and there’s value in not having to do something because done for you, there’s value in, like you say, in some of the soft costs and that a lot of the planning and things done for resiliency is part of the solution, whereas if I don’t do it, then I have to manually go do it somewhere else. There’s real value in that. But those are all highly variable.

And when you’re dealing with some customers that are going to be making a purchase decision, for example, they may want to say, “Let’s disregard that because I don’t care about it or this isn’t my situation.” The hard costs, no arguments. The soft costs, I’ve had the arguments, I’ve got the scars. I know how to separate the two. And I say, “The hard cost is what you make your decision on, the soft costs or where you get more value.”

Krista Macomber: Yep. Yep, a hundred percent. So maybe we can, I guess, talk a little bit about some of those scars, not to bring up some PTSD, but maybe we can talk a little bit about that, maybe some of the conversations that you’ve had, Randy. I know we have had conversations around, again, leaning a little bit into the cyber attacks and cybersecurity areas of things like, okay, your cyber insurance premiums, how much those might go up if you are attacked, the cost of your downtime if you are attacked and you cannot recover, how much does every hour cost your business? Those types of things. So I guess maybe any commentary from some of those conversations that you’ve had might be interesting to our listeners.

Randy Kerns: Yeah, the insurance one is one I’m somewhat down on right now in that if you go through … I did this with a vendor, go through their checklist for their cyber insurance, you have to do this, this, and this. There are so many holes in it, such that they wouldn’t have to pay if you didn’t do things. Very irritating. But there’s a number of them such that if you get a particular solution, it can checkbox a bunch of those that’ll help you quite a bit and it actually buys down your insurance.

So sometimes going through this with a new solution can make your insurance a lot cheaper. So that’s a worthwhile to exercise to go through. So that’s a biggie. Some of the other things that you might go through and figure out on the restoration, recovery processes, et cetera, the ability to test those, the automation around that, very important.

Krista Macomber: Yep, yep. I know the testing, I mean, I’m really glad you brought that up because that in fact is becoming not only a best practice, but a requirement, maybe for insurance as we’ve been talking about also for things like compliance with these data privacy regulations that over the last several years we’ve seen become more and more common. So I guess the easier and the less expensive a particular tool can make that testing process be, is going to be another area that can really add a lot of value.

Randy Kerns: It can. The other one is, let me just go through an example here with one particular client and a particular organization had what they called a tabletop exercise on recovery. That’s where they all sat around the table and figured out, “Yeah, we can do it. Okay, we’re good.” And obviously it wasn’t good enough in this particular case, or I probably wouldn’t have been involved. And the executives came down, said, “You didn’t test this?” There’s no good answer here. So it’s very important to do this.

Krista Macomber: Yep, a hundred percent. A hundred percent. So Randy, I think the cost conversation, again, I think as customers are really looking to maybe lean on the cloud to make their lives a little bit easier, a little less expensive. I know it’s an important one. I think we hit on the key topics that I had in mind coming in. Is there anything else you might add?

Randy Kerns: One more on the economics is that a lot of people look at it with a short-term perspective. Your information, your data, the data you keep, the value of the data that’s going to last for a very long time. So normally we look at things from a longer perspective. If you’re going to do things for costs in the cloud, you want to do checkpoints 5, 7, 10 years out there and look at the compounding costs over that time, much more important. And it can be frightening at times.

Krista Macomber: Absolutely. Absolutely. But yeah, I’m glad you brought that up because it definitely is that longer term conversation and the issue of it compounding. It’s very true. You might save X amount in year one or two, but again, that can really just snowball upon itself and really save a lot of money over time, which is something that I think is important for us all to keep in mind, especially if we’re not buying and deploying a box on premises, that becomes a little bit more evident, okay, I’m going to be upgrading this every three, five years, but what if I move to this cloud model and have that in place for, as you mentioned, five, seven, or even longer? What is my business going to look like? So absolutely. I’m glad you brought that up.

Randy Kerns: One of the questions that always comes up, and again, the project I was doing, we were talking about they’re accumulating or collecting lots of data. I ask them, “How long are you going to keep this data?” And you get this strange look back. And they’re like, “Well, forever.” I say, “Okay, so this is something that’s going to keep charging you money for a long time.”

Krista Macomber: Yes.

Randy Kerns: You can just see the wheels start to turn, they’re starting to think about this long-term cost.

Krista Macomber: Yep. It’s so easy to swipe a credit card and to not think about the longer term view. So-

Randy Kerns: Absolutely.

Krista Macomber: All right, well, with that, unfortunately, I think we are just about out of time here, but Randy, I want to thank you so much. This has been a pleasure as always. It is always so great to hear your perspective. You are always very grounded in the view and the vantage point of the customer, which I think is so valuable to keep in mind. So thank you very much.

Randy Kerns: Okay. It’s all fun.

Krista Macomber: And thank you everyone for joining and for listening. We really appreciate it as always. Please make sure to like, to subscribe so that you don’t miss any future episodes from us, and we look forward to seeing you next time here on Infrastructure Matters.

Other Insights from The Futurum Group:

Pure Storage Launches Pure Protect DRaaS To Simplify Disaster Recovery

Pure Storage Brings Purely Block Storage to Azure/VMware Cloud

Pure Storage Revenue Beats Expectations, as Gen AI Adds to Growth

Author Information

With a focus on data security, protection, and management, Krista has a particular focus on how these strategies play out in multi-cloud environments. She brings approximately a decade of experience providing research and advisory services and creating thought leadership content, with a focus on IT infrastructure and data management and protection. Her vantage point spans technology and vendor portfolio developments; customer buying behavior trends; and vendor ecosystems, go-to-market positioning, and business models. Her work has appeared in major publications including eWeek, TechTarget and The Register.

Prior to joining The Futurum Group, Krista led the data center practice for Evaluator Group and the data center practice of analyst firm Technology Business Research. She also created articles, product analyses, and blogs on all things storage and data protection and management for analyst firm Storage Switzerland and led market intelligence initiatives for media company TechTarget.

Krista holds a Bachelor of Arts in English Journalism with a minor in Business Administration from the University of New Hampshire.

Randy draws from over 35 years of experience in helping storage companies design and develop products. As a partner at Evaluator Group and now The Futurum Group, he spends much of his time advising IT end-user clients on architectures and acquisitions.

Previously, Randy was Vice President of Storage and Planning at Sun Microsystems. He also developed disk and tape systems for the mainframe attachment at IBM, StorageTek, and two startup companies. Randy also designed disk systems at Fujitsu and Tandem Computers.

Prior to joining The Futurum Group, Randy served as the CTO for ProStor, where he brought products to market addressing a long-term archive for Information Technology and the Healthcare and Media/Entertainment markets.

He has also written numerous industry articles and papers as an educator and presenter, and he is the author of two books: Planning a Storage Strategy and Information Archiving – Economics and Compliance. The latter is the first book of its kind to explore information archiving in depth. Randy regularly teaches classes on Information Management technologies in the U.S. and Europe.


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