Despite the buzz and hype, and the unfettered success of “born in the cloud” companies such as Netflix, Slack, and Uber to stay on cloud infrastructure as they scale, the open secret in the industry is that legacy enterprises have launched numerous mass migration projects with mixed success. And a few months ago Martin Casado and Sarah Wang from Andreesen Horowitz threw some rain on the parade.

However, as industry experience with the cloud matures — and we see a more complete picture of cloud lifecycle on a company’s economics — it’s becoming evident that while cloud clearly delivers on its promise early on in a company’s journey, the pressure it puts on margins can start to outweigh the benefits, as a company scales and growth slows. Because this shift happens later in a company’s life, it is difficult to reverse as it’s a result of years of development focused on new features, and not infrastructure optimization. Hence a rewrite or the significant restructuring needed to dramatically improve efficiency can take years, and is often considered a non-starter.

The unicorn experience makes me think its possible to go and stay all in on cloud, but it would take commitment to new ways of managing infrastructure. the dropbox exception is an interesting use case as their business is scaled storage, so they might get efficiency.

Long term, if cloud behaves like other commodities (upstream oil processing, electricity generation, etc) then public cloud should become a utility. After all, at some point in the early 20th century, no one operated their own electricity generation plants anymore. We might explore need to dive in on the characteristics of a utility, to see if cloud is behaving like this or as more of a product that can still be brought in hosue for value at scale.