Thread by @QuinnyPig

The entire reason we didn’t take VC money for the Duckbill group is that we would be pushed to capture as much revenue as possible, as quickly as possible. And the customers lose in that scenario.

https://twitter.com/myfriendjanine/status/1357126566690623489

Seeking growth and scale at all costs creates situations for bad outcomes for customers, like one-size-fits-all algorithms and automation that doesn’t take into account the customer’s specific goals, architecture, constraints—and their own customers.

“You’re spending $150 million a year on @awscloud? Cool, we’ll knock hilarious amounts off of that for a flat fee that’s less than one engineer’s annual salary.”

VCs would demand a percentage pricing model, and then the whole thing goes to custard.

Terrific question! Let's model it out, because it's extremely unintuitive.

You're spending $150 million. I offer to come in and help with the bill, either for "percentage of savings" or "percentage of spend."

That sound you hear is impending doom.

https://twitter.com/TheKanter/status/1357177802877923334?s=20

"You'll save $15 million a year by buying this savings plan commitment. Here's my seven figure invoice."

You will Not Be Happy with this outcome, I promise.

And your Procurement folks aren't stupid; they'll see this coming a mile away. So what do you do instead?

You'll do all the "easy stuff" first. You'll buy RIs and Savings Plans, you'll optimize the heck out of what you're doing to the best of your ability FIRST, then bring us in.

And the first thing we'd want to do is unwind a lot of what you just did in a hurry.

It also refocuses us away from "optimize the bill" and into "lower the bill." These things are radically different. On a flat fee model, what we suggest you do is what we would do in your shoes. For some specific things it means spending more money, not less.

At a percentage of the bill model, there are some services that aren't optimizable; you'll be upset to pay a percentage of that.

For a percentage-of-savings model, you'll argue all day long about how "realistic" some of the suggestions are.

"Fixed fee only" removes *all* of this, it aligns our perspective across the board, and it leads to better outcomes far sooner.

And all it costs us is larger checks for the same work. All things being equal? We vastly prefer it this way. We don't have to capture ALL the value.

Bingo. The client was extremely happy with the discovery, and we made the exact same amount as a result. Everyone walked away thrilled to pieces with the engagement.

https://twitter.com/mike_julian/status/1357181294795313153?s=20

So yeah, that's the model. "Flat fee with nothing else to sell you." We don't do implementation work (so we're not going to spec out work for ourselves to bid on), we have *no partner relationships* period (so there's no referral money for us), and we're not selling tools.

Mike isn't kidding. Our employee Conflict-of-Interest policy rivals that of most investment firms.

https://twitter.com/mike_julian/status/1357184999544393728?s=20

To be fully transparent, we *do* have a retainer-style engagement where we work with you to manage your spend on an ongoing basis, but it’s separate and distinct from our initial cost pass / @awscloud contract negotiation stuff.

We don’t surprise you.

https://twitter.com/joshtisdale/status/1357190027646824449

A number of the big consultancies will do projects like this “for free,” but then their solutions all magically require 18 months of billable work for folks who charge by the hour.

This is why we don’t have an implementation team.

https://twitter.com/thekanter/status/1357177948789329922

We really have three distinct offerings.

1. Cost Optimization. We fix the bill and work miracles.
2. AWS contract negotiation. This deserves its own thread tomorrow.
3. Ongoing cost management. Think of it like an outsourced cloud finance team.

https://twitter.com/jasonandrade/status/1357206410744926209?s=20