Bless the OpenStack crowd for taking the trouble to figure out the exact moment when it becomes cost effective to run your Amazon Web Services workload in a private cloud ($7,644/month, as Brandon Butler reports). If only that number mattered.

See also: Amazon’s Cloud Is The Fastest-Growing Software Business In History

After all, public cloud computing has never really been a matter of shaving hard costs associated with compute and storage. Instead, public cloud computing is a matter of developer convenience and, ultimately, productivity. That isn’t something that shows up in the $7,644 number.

Apples And Oranges

Private cloud vendors seem to be stuck in the past, selling a vision of IT cost savings in a world that increasingly bypasses IT. Even the most cursory glance at the data for Shadow IT—all those computational installations that happen without centralized approval from the IT department—tells us that enterprises route around IT.

See also: Shadow IT: Far Bigger, Less Manageable And More Important Than You Think

In fact, Gartner projects that 38% of technology purchases already happen outside IT, a number that will balloon to 50% by 2017.

In light of this reduced relevance for IT, bean-counting server costs seems antiquated and counterproductive. Rather than focus on cutting IT costs, savvy enterprises are looking for ways to grow revenue. 

Red Hat CEO Jim Whitehurst points out that infrastructure is “100% cost-driven,” with no upside to cutting costs. Whereas if companies “double the productivity of their developers,” he goes on, they can develop money-making apps and thus “can grow revenues and the bottom line…. That’s where CIOs SHOULD be focusing.”

Making Developers Happy

While self-serving, this has been Amazon’s message from the beginning. AWS executives have long pilloried the very idea of “private cloud” as inimical to true cloud productivity. Amazon Web Services SVP Andy Jassy pillories private clouds, arguing that 

If you look deep into what [private cloud vendors] are offering, you will see that it’s basically an internal data center that is virtualized and has some management tools. Organizations that have private cloud systems will have missed out on all the advantages and benefits of going into the cloud.

Modern enterprises need to embrace this new reality. IDC, long a conservative ally with IT, is now singing the developer song in a new report:

”Developers, developers, developers, developers!” (thank you, Steve Ballmer) will be the most strategic mantra for third platform competitors in 2014—for the next two decades, the biggest winners in the industry will be those that can capture the hearts and minds of this next generation of innovators over the next two years. Miss the developers, miss the market.

To attract developers, enterprises must shift how they think about technology. Smart enterprises recognize that software doesn’t make developers productive; rather, developers make software productive. The more flexible the hardware and software licensing developers get to use, the stronger their productivity.

While this definitely means more public cloud resources, it also entails open source, as ActiveState’s Bernard Golden writes:

NoSQL, Docker, Cloud Foundry and OpenShift will power third-platform applications. All rise from open source, becoming comfortable with open source is a core capability for the future—and by comfortable, I mean understanding the dynamics of open source and being involved in its relevant communities. This isn’t a world of simply viewing an open source vendor as a less expensive version of a proprietary software company.

Again, the emphasis that developer-centric computing isn’t about lower costs. It’s about improving output, which is a function of flexibility.

The Future Is Ephemeral

Private cloud vendors, like proprietary software vendors before them, want enterprises to believe that there’s value in permanent ownership. But given how fast technology is moving, being saddled with hardware and software “assets” is a liability. It constrains innovation because it dampens companies’ ability to iterate, as AWS data science GM Matt Wood told me:

Those that go out and buy expensive infrastructure find that the problem scope and domain shift really quickly. By the time they get around to answering the original question, the business has moved on. You need an environment that is flexible and allows you to quickly respond to changing big data requirements. Your resource mix is continually evolving—if you buy infrastructure it’s almost immediately irrelevant to your business because it’s frozen in time. It’s solving a problem you may not have or care about any more.

Will the price of such iteration-friendly infrastructure sometimes cost more? Of course it will. But that’s measuring costs without offsetting them with productivity gains. In the modern enterprise, developers are the determining factor in whether you succeed or fail. 

That may cost more than $7,644 per month. But that’s beside the point.

Lead image by NASA Goddard Space Flight Center