Convincing cloud customers the cost is worth it prompts a performance upgrade

Cloud costs dissuading customers to remain as clients have prompted tech companies to intervene with their own cost-savings advice.

Salesforce co-chief executive Bret Taylor.

In a bid to keep customers from ending contracts, so-called cloud providers are now using their own product to improve customer performance and reduce costs.

The move comes amid recent scrutiny over what some have ­described as “excessive costs” of using cloud-based services programs.

Salesforce co-chief executive Bret Taylor said cloud consolidation had become a key focus for the company and that articulating value to customers was more important than ever. Reassessing the value of cloud “as it relates to spend, I think this is a real trend”, he told The Australian.

“We’re talking to companies about their cloud spend,” he said.

“It’s not just on the software part of it, it’s also on configuring it and implementing it, and we’re doing everything in our power to reduce that implementation cost and complexity so that our customers can actually get up and running faster.”

Mr Taylor said evaluating cloud spending was often seen as a business case and that the benefit was typically only realised after programs were up and running.

Salesforce would now work at reducing the time it took customers to get a program live so they could realise “the cost savings of their digital investment fast as possible,” he said.

“It’s really important that we focus not just on customer satisfaction or growth, but also on cost savings and digital technology, strategy, automation, and intelligence, which drives cost savings as well,” he said.

“Chief financial officers are more important now in technology discussions than ever before.”

He said the average company used more than 900 ­applications and it was difficult to measure whether all were necessary.

Azul Asia-Pacific vice-president Dean Vaughan said his company was aware of the scrutiny, and much of it came from IT departments setting up provision within the cloud to meet tight deadlines.

“All of a sudden those cloud costs can get added and these organisations blow their budget,” Mr Vaughan said.

Azul Asia-Pacific vice-president Dean Vaughan.

“What we’re advocating is that it’s not black or white and that there is a third approach. We call this the cloud paradox, which is to only put certain infrastructure into the cloud. We’re starting to use the cloud to improve the performance of the cloud.”

Mr Vaughan likens it to having certain parts of a car motor outside the vehicle.

“Basically, you’ve got the engine of the car, but what we’re doing is we’re taking the carburettor out and running that in the cloud because we can improve fuel efficiency better,” he said.

In real-world applications, many companies had taken only hosting parts of an app within the cloud via an Azul product called Prime.

“I’m seeing across multiple vendors a shift to leverage components or the functions of an application in the cloud rather than the whole application,” he said.