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Driving adoption: Are high costs putting public cloud out of reach to non-profits?

Facebook CEO Mark Zuckerberg’s insights into the sky-high cloud bills faced by some non-profit organisations prompts questions about whether the public cloud giants should do more to make their services more accessible to the third sector

Late last year, Facebook CEO Mark Zuckerberg suggested that cloud computing would work out too costly for the philanthropic joint venture, the Chan Zuckerberg Initiative (CZI), that he had created with his wife Priscilla Chan.

The initiative, founded in 2015, is billed by the pair as an organisation geared towards using technology to help solve some of the world’s “toughest challenges” in the fields of science, education and justice.  

In a public debate with CZI co-presidents Joseph DeRisi and Stephen Quake in October 2019, the group said progress in scientific research was being held back by the exorbitant cost of cloud, with Amazon Web Services (AWS) among the players called out for criticism.

“In our bio board meetings, one of the things we talk about is the cost of compute and our AWS bill, for example, is one of the specific points,” said Zuckerberg, before joking: “Let’s call up [Amazon CEO] Jeff [Bezos] and talk about this.”

Zuckerberg added: “It’s interesting, the bottleneck for progress in medical research at this point, a lot of the cost for it, is on compute and the data side and not strictly on the wet labs or how long it takes to turn around experiments.”

This is less of an issue for CZI, which has managed to secure funding through Zuckerberg selling billions of dollars in Facebook stock, but other organisations – particularly those in the developing world – are unable to afford cloud computing, said Quake in the debate.

“The cost of the sequencing and the lab work has gotten to the point where you can do this almost anywhere in the world. It’s gotten that cheap,” he said.

“The compute to be able to analyse that data is unfortunately not available to the vast majority of the people that do that. It’s very often the case that you’ll go to one of these low-income resource settings, they’ll have a sequencer but it’s collecting dust because they can’t compute. Even if they can access the cloud, they can’t afford it.”

So is cloud computing really too expensive for all – or is it just too costly for non-profits?

“Any organisation should expect that if they’re using more and getting more value, then there’s a cost associated with that”
Darren Mowry, AWS

Many enterprises that use cloud infrastructure have a pragmatic response when asked whether it is too expensive – there is a tendency to compare what came before cloud computing, both in terms of expense and capability.

“There is clearly a margin that these guys make – we know how successful AWS is,” says Andrew MacInnes, CTO at John Lewis.

“When we do the comparisons of where we have existing kit in, it is cheaper for us to use and build on that kit, but as soon as you start talking about building new capabilities and automating and starting to build out the whole stack, the business case for on-premise disappears. So, rather than looking at the cost, it’s about looking at the value, even if it’s expensive.”

Matthew Cresswell, director of data platforms at Just Eat, echoes MacInnes’ thoughts, and adds that it is about evaluating the total cost of ownership (TCO) – even though he says the cost of cloud is increasing.

“The fact is, we’re able to ingest 90% more data [using Google Cloud Platform] and then also leverage that,” he says. “For instance, we reviewed our call centres and wanted to understand what happened with our super loyal customers if we didn’t answer their calls within 30 seconds.”

By being able to store and analyse the data in the cloud, Just Eat realised that it would be worth opening up a dedicated line specifically for loyal customers. “So the spend has been justified by that exercise, which has identified £70m of value for us,” says Cresswell.

Calculating the value of cloud

Such “value of cloud” conclusions must come as music to the ears of cloud suppliers, but customers are wary of costs increasing over time – especially with new features being introduced so often.

“The hope that we all have is that the competition in the marketplace drives down the cost and the market will therefore fix itself,” says MacInnes.

Darren Mowry, managing director of business development for AWS in Europe, Middle East and Africa (EMEA), says AWS is helping its customers to manage cost through its Trusted Advisor tool. This is designed to ensure customers are aware of how many instances are running, and which ones are lying unused for a certain amount of time. The company also brings down the cost of cloud computing over time, he adds.  

“We’ve reduced prices approaching 80 times, and we’re going to continue to do that, but I would say that even with our focus to drive the cost out of it, it is our responsibility to help customers understand what they can do to control the costs,” says Mowry.

“So if you have unfettered growth and you do not think critically on how to use the cloud, it can get expensive the same way that anything can get expensive, but controlling this has got to be something we do together with the customer.”

Cutting cloud costs for non-profits

However, the issue that Zuckerberg highlighted was more about the cost of cloud for non-profits, and perhaps it is here where there is a real issue. How can organisations that lack funding get the resources they need at a lower price?

Raphael Gottardo, scientific director at the Fred Hutchinson Cancer Research Center, a not-for-profit that looks for new ways to prevent, diagnose and treat cancer and other life-threatening diseases, says cost is a big factor when it comes to deciding which cloud services to use.

The Fred Hutchinson Centre has funding from CZI, so when Zuckerberg was talking about cloud use, the organisation may have been in his thinking.

“I think it’s interesting because [Zuckerberg] has made a fortune out of the cloud, but I think what he says is fair,” says Gottardo. “Cost is a factor – we are a non-profit and so we have to think about not only how much is that going to cost us today, but 10 years down the road, once we fully commit to a platform, how are we going to pay for that infrastructure?

“At the moment, we’re still testing and piloting, and frankly our partners, including AWS, have been very generous with us. But that’s always going to be a big factor in how we can make the best use of the cloud. We don’t know where that’s going, but it could turn out to be very, very expensive.”

AWS will point to its Credit Program, which provides access to $2,000 in AWS promotional credits, so that non-profits can implement cloud services without upfront investment in physical infrastructure.

Read more about cloud economics

There are also programmes specifically for non-profits that are aiming to solve the world’s most pressing challenges, and for organisations that want to speed up their research outcomes using high-performance computing.

Meanwhile, participants in Google’s Data Solutions for Change programme can receive up to $5,000 a month for a six-month grant period, while donations and discounts are available for non-profits that want to use Azure and other Microsoft cloud services.

All the cloud suppliers offer various programmes specifically for non-profits, but Gottardo believes there is still work to be done to make cloud computing affordable in the long term for non-profits.

“It’s critical,” he says. “And it’s going to become even more important as we’re doing more compute, data science and generating more data, so we’re going to rely on the cloud substantially. I am hopeful that there will always be some sort of special thing for non-profits – I would love for everything to be free, actually because it’s so important.”

But that is unlikely to happen. As Mowry says: “Any organisation should expect that if they’re using more and getting more value, then there’s a cost associated with that.”

However, considering that the cloud market is heading for a worldwide revenue run rate of $100bn a year, according to Synergy Research Group, perhaps there could – and should – be more discounts and grants available for non-profits.

Perhaps more importantly, there needs to be a way to maintain reduced costs for non-profits in the long term and make this clear to such organisations from the outset.

Read more on Infrastructure-as-a-Service (IaaS)

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