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As central banks worldwide embark on a crusade against inflation, there’s still a lot of uncertainty about the state of the global economy and where prices (and costs) will go from here.

Engineering organizations are facing increased operating expenses (OpEx) on multiple fronts. Cloud costs are growing across all major providers, with Azure and Microsoft Cloud raising prices 15% year-over-year (YoY) in 2023. And that’s not to mention if your technical estate is running on VMware, which reportedly has raised prices between 600% and 1000% since the Broadcom acquisition. These increases compound the issues created by cloud native toolchains that over the past decade grew more complex, more disjointed and more expensive.

At the same time, salary data and talent retention policies are sending mixed signals. While salary increases are no longer accelerating at the pace we saw back in 2021, engineering compensation packages (especially for senior engineers) are still outpacing inflation, with Kubernetes engineers’ salaries growing 10–15% YoY in 2023.

According to Gartner, most employees in the cloud industry estimate they can earn 11% more by simply switching jobs, and they “actually might be underestimating their increased earning potential.” In contrast, Gartner also reports (subscription required):

“35% of organizations say their 2024 merit increase budgets will remain unchanged from 2023, while 19% plan to decrease or have already decreased their budgets. Only 11% of organizations say that they will increase their merit budgets for 2024. Employees, on the other hand, are expecting an increase of over 7%. This is a potential source for disappointment as most employees will expect their increase to match inflation.”

Retaining top talent and balancing salary expectations, while simultaneously addressing the growing complexity of toolchains and cloud bills that can quickly get out of control, are painting a challenging picture for executives in any industry.

What to do? Do you cut headcount and if so, where? Can you afford to consolidate your toolchain and at what price? How much can you save on your cloud bill? How do you retain top talent that will make the difference in growing your overall productivity and market share?

Platform engineering has taken the engineering and cloud native world by storm in the last two years. All major analysts are calling it a key trend in 2024 and years to come, with Gartner forecasting that “80% of all enterprises will have a platform engineering initiative in place by 2026.”

There are good reasons why platform engineering is hyped, and it might very well be the solution that so many executives facing the challenges described above are looking for.

Platform engineering is the discipline of taking the tech and tools floating around your enterprise organization today and binding them into golden paths that remove cognitive load from developers while enabling true self-service. The sum of these golden paths is called an internal developer platform (IDP), which is the end product built by a platform team for their developers.

Platform teams can design clear, security-vetted roads for application developers to consume infrastructure and resources and interact with their cloud setups. This drives standardization by design across the entire engineering organization and has huge implications for all the questions outlined earlier.

Let’s say, for example, you decide to optimize your processes or work structure. Before you can remove people from any process, it’s crucial to standardize and automate the related workflows as much as possible; otherwise, everything will collapse. Rolling out an IDP will not only massively increase your degree of standardization, but it will also accelerate vendor agnosticism, allowing you to avoid vendor lock-in and consolidate your toolchain faster (and with a lot less pain).

A well-designed IDP can also provide transparency and visibility into your cloud costs, allowing you to tag resources and track costs granularly across all your business units and technical estates. This is key to cutting costs without compromising performance.

Companies adopting platform engineering create a much healthier work environment for developers and operations teams because it minimizes conflict. This leads to lower burnout and a more attractive culture that helps retain top performers. Increased developer productivity also means a shorter time to market (with an average 30% drop for teams rolling out enterprise-grade IDPs) and market share growth.

Sounds good right? And it is. The trick here is not to get lost in the process. Many enterprises have bought into the promise of platform engineering, but they are failing to execute properly on it.

Shipping an IDP that’s truly enterprise-ready, meaning it has an orchestration layer that comes with all enterprise features, including single sign-on (SSO) and role-based access control (RBAC), might seem daunting at first. It requires buy-in from multiple stakeholders (devs, ops, execs) and a different approach from what some engineers are used to. The mistake that many platform teams make is to try and please everyone at once. That is the fastest way to lose momentum and drag your platform engineering initiative out for months or even years before it shows any value. At that point, requirements will have likely changed and your IDP will land in the cemetery of failed corporate initiatives.

Successful platform initiatives, on the other hand, start with a minimum viable platform (MVP) designed to quickly show value to all key stakeholders. MVPs follow an established framework that clearly measures impact across the metrics that matter to everyone involved, then iterate from there. An MVP is the proven way to get everyone in an enterprise org on board with the platform initiative within weeks (instead of months or years) and then expand to a full-blown enterprise-grade IDP that can be rolled out across all teams.

Adopting platform engineering, and especially doing it quickly and reliably, is a key differentiator between companies staying competitive vs. the ones falling behind. Humanitec enables teams to roll out IDPs that are enterprise-ready. Talk to our platform architects if you want to learn more about our MVP program.

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Your Engineering Organization Is too Expensive - The New Stack