We are here at AWS re:Invent
and the future of Cloud and Gen
AI and the overlap is a key focus.
With me is an expert on both matters, Filippo Scognamiglio
He is a Managing Director and Partner at BCG.
He is also Global Head of Cloud Advisory.
Filippo, thanks in advance for the time. Thanks for having me.
So this year has been a breakout year.
Gen AI: super hot topic.
What effects are you seeing on the cloud industry?
Well, first and foremost, tremendous amounts of investment.
Microsoft clearly has a leading partnership with Open AI and they've been
making great inroads and building capabilities on their cloud platform, Azure.
Amazon and Google have been racing to catch up, and potentially even leapfrog
what Microsoft has been doing and pouring
tremendous amounts of investment in this space.
So at BCG, you have introduced a standardized
pricing index for the cloud industry.
What are you seeing?
Well, lots of surprises.
In fact, it's our first attempt at creating the equivalent
of a Big Mac index, but for cloud resources specifically
to make them comparable in a space where historically, prices
really were not that comparable considering their complexity.
In looking at these comparisons, we found actually quite a lot of surprises.
I think the biggest one is that cloud is not more affordable in emerging economies.
Matter of fact, it is more expensive in emerging economies,
the cheapest location to run cloud workloads actually happens
to be the US, which is not what we expected when we initiated this research.
Yeah that’s surprising.
So when you think of the year ahead and for those who are looking to utilize
GenAI, I have to ask you an age old tech question,
is it better to build or is it better to buy?
When it comes to web scale, large language models; buy is definitely the choice
right now. Trying to replicate what some of these companies have done
in your own local environment is prohibitively expensive.
I do believe that
in the future we will find more specialized models
that can operate at a smaller scale for specific purposes and use cases.
And with that class of models, I think we'll find an opportunity to build,
in addition to relying on the quote “bought” models from cloud service parts themselves.
Filippo, thank you very much.
Filippo Scognamiglio joining us there.