The Other CFO: The Rise of the Cloud Economist

Like it or not, cloud fees aren’t predictable capital costs. And like it or not, cloud usage is on the rise. IDC forecasts cloud spending will dramatically increase as organizations continue to fund and accelerate their cloud deployments during the current pandemic.

Without someone on hand who understands the technical and financial aspects of cloud management, things can spiral out of control; anyone even slightly familiar with cloud providers knows service options change rapidly and regularly.

And there’s a further complication: While cloud investments are rising, budgets are getting tight.

Isn’t cloud old news?

Nothing about cloud management is set it and forget it. It’s a full-time job, which is why we need a new role, a new kind of CFO. The other CFO -- a cloud financial officer (or if it’s not C-level, a cloud economist).

Cloud economists will understand cloud deployments and usage. They’ll pay for the right amount of cloud storage to suit their organizations’ needs. They won’t overspend, and they’ll advise on cost optimizations.

Cloud was something of an add-on, a glittering bauble, an experimental work. But now, companies are building cloud-forward, cloud-first, and cloud-native apps. Cloud is the default.

To manage this new reality, the cloud economist must understand in equal parts the tech and the financial aspects of cloud strategy.

Why are costs spiraling?

It starts innocently enough. An organization opens a new account. The finance department covers the planned cost for the app. Initially, no charges are made.

The DevOps team starts building. They’re conscientious about their usage during the build process. They may even have 30, 60, or 90 days of free usage on their plan. But at some point, real utilization occurs.

By then, the DevOps team has taken their keyboards and ridden off into the sunset. The Ops team has maybe two people maintaining the app, and then suddenly costs go through the roof.

Accounts payable sees the bill and hands it to the CFO -- the original CFO, the chief financial officer -- who isn’t happy.

Cloud economists will need access to monitoring because monitoring and alerting will inform them about usage (and therefore cost). There’s at least one free cloud-cost calculator tool out there capable of doing this, but they will need to ensure they have robust performance monitoring tools allowing them to see into the cloud-tech side -- how the data is flowing -- and capable of translating this usage into dollars and cents with a window into their cloud providers’ dashboards.

Cloud economists are juggling many plates. They track the costs, but they’re not in finance.

Can’t a SysAdmin do this job?

Cloud economists will understand the various strengths of cloud providers such as Google Cloud Platform, AWS, Azure, and IBM Cloud. Keeping abreast of their ever-changing service offerings and what tier of service on which platform makes the most sense for a particular app.

They’ll understand the technology, but not at the code level. They’ll appreciate the program demands along with the foundational technology it’ll run on. They’ll also know what kind of customer base the program will serve along with expected data consumption and data flow patterns.

Cloud economists will select from the menu of cloud services and platforms and right-size it. If something breaks, this specialist will understand the next steps to take within the architecture.

They aren’t going to lead the programming team or direct any of the coding. This person will simply advise the platforms used in specific use cases. They’ll also approve variances.

Right now, we have an ad hoc cloud version of a systems administrator managing these things, with one critical difference: This person doesn’t monitor cost.

The cloud economist will have a deep respect for the budget spreadsheet and an intimate understanding of how applications are built -- helping tech pros get what they need and prevent financial disaster.

Why is this position full-time?

The cloud players change their offerings more frequently. Aside from the Big Four, there are smaller operations worth considering, too. And the tiers of service for each of the cloud providers change every month.

Cloud economists will look at the current slate of options from cloud providers and compare them to the existing set of in-house applications. They’ll migrate apps for the same reason the accounting team may help determine when it’s time to leverage your loans or refinance: it’s in the financial or operational interest of the company.

You need a permanent, specialist role for this position for the same reasons legal and accounting teams are permanent roles. For small companies it could a case of hiring an external consultant on a regular basis.

The vitality of the cloud economist role shouldn’t be underestimated. They’ll be there at the build. They’ll be there when actual usage varies. They’ll know when the plans invariably change. And they’ll help lay the foundation for the future of cloud.

Rani Johnson is the global vice president and CIO at SolarWinds, an IT infrastructure management company headquartered in Austin, with more than 30 offices and 3,200 employees worldwide. Rani brings with her 20 years of experience in IT, as well as a background in technical sales and product management. As CIO, Rani leads the SolarWinds IT and business applications team including DevOps, IT operations, cybersecurity, project delivery/change management, and business continuity planning. She previously led the IT function at companies in both the energy and software industries, most recently as the CIO for the Lower Colorado River Authority.