The Blog

The Dumbest Dollars a Cloud Provider Can Make

Calendar Icon 10.27.2021
aws-section-divider aws-section-divider

Let’s talk about the dumbest dollars a cloud provider can possibly make.

No, I’m not talking about data egress or the Managed NAT Gateway data processing fee; those are rent-seeking behaviors that embody Day 2 thinking.

I’m talking about the dumbest money — the kind where cloud providers step over dollars to pick up pennies.

Give me the rundown, Corey

Let’s pretend that I run a company with a handful of engineers, and I need to choose a cloud provider. Google Cloud offers me $50,000 in credits, AWS offers me $60,000 in credits, and Azure offers me a bunch of excuses about their poor excuse for a security program. Which cloud provider do I pick?

The answer is obvious: the one my engineers are already familiar with. Doing anything else is sheer lunacy. Learning a new cloud provider costs an incredible amount of time, and in the world of business, time is very much money.

Wait, are you saying …

My point is, thus, that the dumbest possible money a cloud provider can make is from charging for training.

Here’s a fact that should be obvious to anyone who works in this industry with two functioning neurons to bang together: The cloud provider that an engineer lobbies for is the cloud provider that they know how to use effectively.

Gartner VP and distinguished analyst Lydia Leong hit the nail on the head last week when she called out that free training is a loss leader. Companies offer loss leaders to get people in the door so they buy other things. It’s a time-honored business tactic.

So, uh, I should get cloud training for free??

While all the major cloud providers have free self-paced training options, they don’t go far enough. “Pass this training and we’ll give you $300 in credits” is the kind of incentive I’d expect to do well in the market. Certifications should be free, not hundreds of dollars, because, well, look at the folks who take these certs! They often strongly identify with their credentials. I see the logos for these certs in people’s email signatures. They’re listed on resumes, in some cases before the person’s degree.

“Should we charge them more for this?” No, you jacka–! The $150 or $300 or whatever per test is IRRELEVANT in the larger context of your cloud business. By the time someone studies and crams their head full of your specific platform well enough to pass a certification, they’re significantly invested in your platform. You don’t need to charge them a few hundred bucks, because they’re going to influence so very much more spending on your platform in the near future. You want engineers and companies to spend more on the platform, not your courses.

I do want to call out l that the training and certification team at AWS are wonders of the world. Every time I talk to those folks, I come away deeply impressed not only with their technical acumen but their ability to explain complex concepts simply. They are wonderful people who serve an incredibly important function, and I’m in no way suggesting otherwise.

My issue lies entirely with charging for the training team’s work. Bake in the cost, because the influenced revenue that they drive is monstrous compared to the relative peanuts they bring in directly.

It can’t be that simple … but just maybe it is

I’m sure there’s something I’m missing here, but I can’t for the life of me figure out what that might be. If you do, please reach out and let me know, because this practice of charging diehards to become experts in every aspect of a platform has never made a lick of sense to me.

I get that training and certification are probably making some money for the large cloud providers, and at their scale, some money is a gargantuan pile of cash. But it’s dumb money! Those gargantuan piles of cash are still pennies next to the heaping mountains of gold bars the size of Mount Rainier when you consider future cloud spend. How much revenue training brings in is directly correlated with how much shame a cloud provider should feel about charging for it in the first place. Please be smarter about this.