Apply a Barbell Strategy to Control Cloud Data Warehousing Costs
Money Is Tight
While aggressive AI, analytics, and data investments are often the best strategies for business success, line-of-business and IT execs worldwide understand that money remains tight. According to Gartner’s 2024 CIO and Technology Executive Survey, ” CIOs in all regions of the world are faced with expected budget increases that are only marginally above projected inflation and well below expected increases in revenue.” 1
Invest Wisely
Given these constraints, organizations need to spend wisely. The question is, where to invest?
One answer to this question was presented in a recent webinar, Getting Control of Data Cloud Costs: A Snowflake Case Study, hosted by Kevin Petrie, VP of Research at Eckerson Group, and Carl Dubler, Head of Product Marketing at Insight Jam Solution Provider Keebo.
In this webinar, Kevin and Carl explored what’s driving up cloud data warehouse costs and the challenges organizations face when trying to govern them. As you can see from Kevin’s survey findings below, the obstacles are many and often interrelated.
Learning from the Financial Markets
The barbell strategy is an investment concept suggesting that the best way to strike a balance between reward and risk is to invest in high-risk and no-risk assets while avoiding middle-of-the-road choices—for example, short-duration bonds at one end of the barbell and long-dated bonds at the other.
Does the barbell investment strategy make sense when investing to control cloud data warehouse costs? While not using barbell investing terminology per se, the strategy that Kevin and Carl proposed mirrored that of a barbell strategy.
Let me explain.
Barbell 1: FinOps
According to the FinOps Foundation. “FinOps is an evolving cloud financial management discipline and cultural practice that enables organizations to get maximum business value by helping engineering, finance, technology, and business teams to collaborate on data-driven spending decisions.” Like its name, FinOps is a financial construct that applies financial concepts such as forecasting, measuring, and accounting.
Barbell 2: Optimization
The Merriam-Webster dictionary defines optimization as “an act, process, or methodology of making something (such as a design, system, or decision) as fully perfect, functional, or effective as possible. When applied to pay-as-you-go cloud data warehousing costs, the goal of optimization is to use as few resources as possible for any given workload. For example, whenever possible downsize to a smaller, and therefore lower cost, warehouse.
Why Invest in FinOps and Optimization
When it comes to controlling cloud data warehouse costs, FinOps and optimization are perfect complements.
Think Before You Invest
The familiar statement, “Not every investment is right for everyone,” certainly applies here. So, learn more before you invest. Kevin and Carl’s webinar is a great place to start. As you watch it, consider whether applying a barbell strategy to control your cloud data warehousing costs is right for you.
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