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Digital transformation finance, what you need to understand

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Many people associate digital transformation and more specifically serverless with low cost. However, those who have experienced the benefits of a serverless mindset and approach know its value. Digital transformation finance involves the Total Cost of ownership (TCO). Digital transformation via a serverless approach will save you money for a significant number of use cases.

Traditionally organizations spend a significant portion of their costs keeping their data centers and systems available, patched, secured, resilient, performing well, and operating effectively. With the emergence of the cloud and now serverless, the pendulum has swung significantly, with more of these responsibilities moving to the cloud provider. 

Shared responsibility model for AWS Lambda
Shared responsibility model for AWS Lambda

https://docs.aws.amazon.com/whitepapers/latest/security-overview-aws-lambda/the-shared-responsibility-model.html

Digital transformation finance drives the pace of evolution

With a serverless approach, you can offload a significant portion of your code liabilities to the cloud provider.

The cloud provider is constantly evolving its ecosystem and adding new features and capabilities that can be leveraged. The more serverless your team is, the easier it is to take advantage of these improvements. With a serverless first approach, you are directly tapping into an ecosystem that is fast-evolving from the demand of customer needs and the pace of competition from other cloud providers. The more abstracted you are from the ecosystem, the more complicated and costly digital transformation finance becomes.

For example, you can leverage these managed Services in the AWS ecosystem instead of attempting to write your own custom code: https://docs.aws.amazon.com/lambda/latest/operatorguide/services-custom-code.html.

CategoryAWS Service
ComputeAWS Lambda
Data storageAmazon S3
Amazon DynamoDB
Amazon RDS
APIAmazon API Gateway
Application IntegrationAmazon EventBridge
Amazon SNS
Amazon SQS
OrchestrationAWS Step Functions
Stream data and analyticsAmazon Kinesis Data Firehose
Common AWS services used instead of code

PatternAWS service
QueueAmazon SQS
Event busAmazon EventBridge
Publish/subscribe (fan-out)Amazon SNS
OrchestrationAWS Step Functions
APIAmazon API Gateway
Event streamsAmazon Kinesis
AWS Services used to implement patterns

Public cloud providers like AWS, Google or Azure are the best platform team for you if you enable your teams to use them.  Depending on the size of your org, you may still need a platform capability to lower the cognitive burden, and establish guardrails, good patterns and good practices for your product/customer aligned teams. This also allows you to continuously evolve your stack to get the maximum serverless advantage out of your cloud provider.

The ephemeral nature of a serverless approach means that the whole solution is executed more often from scratch. This means that the code doesn’t get stagnant, doesn’t degrade and doesn’t fall behind in patches. This prevents a static security attack target and takes advantage of any underlying improvements by the cloud provider. With good observability and CI/CD pipelines, you can quickly identify and fix any issues that present themselves. 

Finance digital transformation to remove liabilities

When AWS announced Amazon API Gateway REST APIs integrates with Step Functions Synchronous Express Workflows, serverless teams across the world were able to remove proxy lambda code between their API gateway and step functions express workflows.  This allowed them to remove a code liability, improve performance (no lambda to execute to perform the proxy capability), enhance their security posture (less code, less risk), lower the cognitive burden for their team ( less moving parts and components to worry about) and cut down on lambda runtime execution costs. 

Developers are one of your organization’s highest costs; making them more effective is a massive cost-saving approach for digital transformation finance.

When meltdown and spectre vulnerabilities were announced, IT organizations across the world scrambled to patch their non-serverless solutions (EC2, AMI, on-prem, etc.). This is non-differentiating work and costs a significant amount of money to fix. For a serverless organization, AWS had patched lambda and Fargate when the announcement came out. They avoided this cost and stress entirely and instead spent that time delivering features and value that differentiated their business.

https://aws.amazon.com/security/security-bulletins/AWS-2018-013/

Updates to other AWS services

The following services required patching of EC2 instances managed on behalf of customers, have completed all work, and no customer action is required:

Fargate

Lambda

Unless otherwise discussed below, all other AWS services do not require customer action.

Processor Speculative Execution Research Disclosure

How much is this peace of mind worth to your organization? 

How much would a security breach cost your organization?

A word about vendor lock-in.

I hear you cry: ‘what about vendor lock-in? With serverless, you’re locked in to the cloud provider ecosystem. What if they hike up the prices?’.

A quick glance at the Price Reduction | AWS News Blog shows the deep commitment and consistency of price drops across the AWS ecosystem going back many years.  With the AWS Leadership Principles and commitment to customer obsession, I don’t see this trend stopping anytime soon.

If you are concerned about switching costs, I would argue that a well-architected serverless solution can be moved to another cloud provider for a lot less than architecting, designing, building and running a “portable”, abstracted, non-locked-in solution from scratch.  With a serverless approach, you maximize the amount of work not done, as Chris Munns recently tweeted about.

True #serverless solutions will never be multi-cloud or hybrid. They'll never be platform agnostic.
True #serverless solutions will never be multi-cloud or hybrid. They’ll never be platform agnostic.

Summary

In summary, a well-architected serverless solution will save on digital transformation finance, but that’s not the real point. A serverless approach frees more of your organization resource to focus on improving time to value, delighting your customers with awesome features and capabilities. It also frees your platform-aligned teams to focus on new differentiated capabilities to enable your customer-facing teams. And it helps you prevent the costs of future problems as the cloud provider is working on your behalf.

It’s a better approach, but like any complex distributed system, it still needs expertise to do well.

Takeaways

  • A Well Architected Serverless Solution will save you money
  • TCO is more important than raw compute costs
  • Leverage Serverless and Managed Services for maximum benefit
  • Lock yourself in to take advantage of the evolution of the cloud provider capabilities
  • Development teams are your most significant Cost; optimize them for high performance.
  • A Well Architected Serverless First mindset and approach will help you sleep better at night 🙂

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