Market Hill | a northdoor group company |

Working on big, expensive, complicated technology problems.

aws

The value creation upside being green in 2022

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One week on from AWS re: Invent 2021. Something Werner said toward the end of his Keynote has stuck in my head.

He talked about how tech leaders are just as responsible for their carbon footprint as any other industry leader.

Surely, this narrative extends to their Private Equity firms.

Are carbon emissions now on your firm’s radar?

Last year, Blackstone announced plans to cut carbon emissions by 15%. This is in the first three years for new investments of buying the asset or company.

That’s a good start.

Green savings are often overlooked in technology, particularly the cloud.

Cloud providers are doing most of the heavy lifting, reducing emissions for you.

1) Planting trees to offset carbon

2) Putting data centres underwater

3) Using AI to decide when to cool or heat servers

Even with the cloud providers doing all the hard work, the cloud still has a big impact on your green credentials.

This is where the new Sustainability Pillar for AWS Well-Architected Framework comes in.

For those who don’t know about the well-architected framework (WAF).

The Well-Architected Framework is AWS’s way of getting you thinking about developing services in the most efficient way.

There is a push in this area as a reaction to customer concerns about cost, performance, and security. I’d like to see Amazon commit more in this area.

The challenge they have, for example, spending less money, goes against how AWS incentivises their account managers. But, being green changes the game.

Being green has the added benefit of saving big $’s.

Consider how much value reducing tech costs and emissions could create for your portco. Performance Efficiency not just in increases to EBITDA, but improves your ability to change the way your portco does business. All while not having to worry about the underlying technology is doing.

If being green isn’t on your PE firm’s agenda yet, it will be next year.

Until next time.

Thomas

You can sign up for more ‘unconsidered needs’ below.

For more ‘unconsidered needs’ you can sign up below…

The next frontier of value creation.

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If you asked most people what they were most excited for at re: Invent, they would say Werner Vogels technical keynote. He does not disappoint.

AWS has invested heavily these last 12 months to improve network latency.

Creating new regions, local zones, relays to connect to space and outposts in the Antarctic. The goal of this is to improve the performance of the applications your portcos build.

You might be thinking, how is network latency and value creation linked?

Simply, it comes down to improving performance.

Good performance improves customer retention, reduces critical bottlenecks and helps you to build new products.

These metrics should be translated into $ growth in revenue or $ increases to EBITDA.

Great performance drives efficiency at scale

Performance efficiency is a way of creating not just fast but cost-effective and scalable systems. AWS’ recent investment to reduce latency will make this easier.

There are typically 6 steps Portcos should take when creating efficient, performant applications.

  1. Monitoring and fixing stability issues in dev.
  2. Consistently instrumenting their design, using data to influence their roadmap.
  3. Creating small, flexible, mutable services and application that can be scaled up, down and across.
  4. Forecasting and provisioning the right type, level, and placement of capacity. Moving workloads with the sun.
  5. Building scalable resilience into applications before it’s needed.
  6. Knowing how fast their application should be and how many things it should do at any time.

Portcos that drive Performance efficiency will be able to make whatever business changes they want without worrying about what the underlying tech stack is doing.

How liberating would that be? That’s where the real value is.

Until next time.

Thomas

You can sign up for more ‘unconsidered needs’ below.

For more ‘unconsidered needs’ you can sign up below.

AI, ML Re: Inventing the future of value creation.

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Today, AWS dedicated 2x full 2hr keynotes solely to AI and ML technologies.

Nearly all of your PortCos will be investing 6/7 figures in Machine Learning and Artificial Intelligence.

You’ve probably even recruited a new head of AI/ML/Data Science to your PE firm to bolster your in-house capabilities.

There is considerable unrealised value in predicting future outcomes. For your PE firm, your portfolio companies and their customers. Today, the key to getting access to this value is data.

Do you sometimes feel that there is never enough data to make decisions when you want it?

How often do you ask your PortCos tech leaders simple questions like:

At what point do our customers churn and why?

What are the scaling limits of our platform?

How much does it cost us to serve each user/transaction?

The answer you’ll often get…. We need more data.

To help you bridge this data gap, AWS have launched AIDA.

AI for Data Analytics (AIDA) ‘can help predict customer churn, create playbooks for next best actions and next best offers, predict the lifetime value of prospects and existing customers to adjust the costs of acquisition and retention, and lower operational costs with supply pre-positioning and workforce scheduling, among other capabilities.’

https://aws.amazon.com/blogs/apn/ai-for-data-analytics-aida-partner-solutions-will-empower-business-experts-with-predictive-analytics/

You probably already have more data that you will ever need.

Most are regularly missing the insight to do something meaningful with this data.

What if you could react to technology-related churn before it happened.

What if you could proactively measure, assess and reduce your cloud cost profile in line with customer demand?

What if you knew that increased investment in product A would create increased demand for product B?

This is something that AIDA could help you do.

How would you benchmark your firm’s AI/ML capabilities?

AI/ML should be delivering insight to help you make decisions in your PortCos.

Similarly, AI/ML should be driving decisions that affect how your PortCos interact with their customers.

Let’s assume that AI/ML or even data science is on your PE firm’s agenda. What do you see as the biggest area for improvement?

Until next time.

Thomas

You can sign up for more ‘unconsidered needs’ below.

For more ‘unconsidered needs’ you can sign-up below.

Why a tech conference in the middle of the desert could be your best chance to create technology value in 2022.

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AWS re: Invent, it’s fast becoming the go-to event for PE firms to mingle with their portcos. Typically, portcos will spend 7/8 figures on cloud services and infrastructure. That number will be growing rapidly.

AWS re: Invent is a great excuse to meet, persuade and ‘encourage’ your portcos tech leaders to find innovative ways to drive their AWS spend down.

Live music, entertainment, and an opportunity to significantly reduce your AWS bill. What more excuses do you need?

There are 5 common steps portco tech teams will take when ‘encouraged to reduce cloud cost’.

These steps will resonate from conversations with your portco tech leader about value creation. This low hanging typically gets at 10-20% of the total problem.

  1. Realise their cloud its costing too much, buy RI’s (or equivalent)
  2. Renegotiate with AWS etc.
  3. Turn off dev/test instances at the weekend
  4. Rightsize simple workloads
  5. Rest

The really good portcos will do the above, 5 steps, just earlier and quicker.

However, they are not particularly innovative, hardly worth a trip to Las Vegas.

What great companies do is create logical maps of their systems, end to end.

They use business>service>infrastructure data and map this to their customer behaviours. They use this to flip the cost equation on its head. This is how to create innovative, disruptive business change without worrying about what the underlying tech stack is doing.

These portcos typically see reduction of spend with AWS around 70%.

Consider how much value that could create, not just in increases to EBITDA. But your ability to fundamentally change the way your portco does business. All while not having to worry about the underlying technology in doing.

That sounds like a good way to spend 4 days in Las Vegas.

Thomas

P.S Whilst here at AWS re:Invent as a special treat, you can expect a daily unconsidered need with an AWS flavour. After this week, normal service will resume.