How Conway’s Law Shapes Cloud Management: Lessons for Engineering Teams

Conway’s Law states: “Your software architecture will always reflect your team’s communication structure.” In my experience, this principle holds true across organizations, often in surprising ways. While it’s commonly discussed in the context of software design, the ripple effects of Conway’s Law extend much further - including into cloud cost management.

Ignoring Conway’s Law doesn’t just result in messy architectures; it creates inefficiencies that drive up cloud infrastructure costs. The way teams are structured - and how they communicate - can significantly impact everything from resource usage to scalability and operational expenses. Let’s explore how team structures influence cloud costs and how aligning with Conway’s Law can lead to better outcomes.

What Is Conway’s Law?

Conway’s Law explains why team structures dictate software architectures:

• Layer-Based Teams: Teams organized by technical layers (e.g., UI, middleware, database) often create tightly coupled monolithic systems.
• Domain-Based Teams: Teams organized by business domains (e.g., payments, invoicing) tend to produce modular, loosely coupled systems.

This law is both a warning and an opportunity. Ignoring it often leads to inefficiencies and technical debt. Embracing it allows teams to build architectures that are easier to manage and scale.

The Hidden Costs of Misaligned Team Structures

When team structures don’t align with architectural goals, inefficiencies arise - and so do unnecessary cloud costs. Here’s how:

• Duplication of Resources: Teams working in silos often create redundant resources. Like multiple teams using their own S3 buckets for similar data can inflate storage costs.
• Scaling Challenges: Monolithic systems designed by layer-based teams are harder to scale incrementally, leading to higher EC2 or RDS costs.
• Operational Bottlenecks: Interdependent teams introduce delays in feature releases or infrastructure changes, which can escalate costs during high-demand periods.

Misaligned structures don’t just increase costs; they slow down innovation and impact overall efficiency.

Modular Teams for Modular Architectures

To counter these challenges, consider structuring teams around business domains rather than technical layers. Here’s why it works:

• End-to-End Ownership: Domain-based teams own features from UI to database, leading to cleaner, modular architectures.
• Cost Efficiency: Modular systems make it easier to isolate and optimize specific components, reducing waste.
• Scalability: Smaller, independent services are simpler to scale without impacting the entire system.

We’ve seen customers reorganize their teams around specific features like billing and analytics. This shift has reduced EC2 and RDS costs by 20% as teams can better align resource usage with their domain’s needs.

Applying Conway’s Law to Cloud Cost Optimization

Here’s how engineering managers can leverage Conway’s Law to reduce cloud costs:

1. Audit Team Structures: Assess whether your team organization aligns with your architectural goals.
2. Restructure for Domains: Shift from layer-based teams to domain-based teams responsible for specific features or capabilities.
3. Incentivize Cost Ownership: Make cost accountability part of each team’s key performance indicators (KPIs).

Building Systems That Minimize Costs

Modular team structures naturally lend themselves to cost-effective cloud architectures. Here are some strategies to support this alignment:

• Tagging and Allocation: Implement tagging policies that tie cloud resources to specific domains, ensuring accurate cost tracking.
• Cost-Aware Design: Train teams to consider costs when designing systems. For example, use spot instances for batch processing tasks.

Empowered teams that own their domains also own their costs, leading to smarter decisions about resource usage.

Overcoming the Challenges of Reorganization

Restructuring teams is no small task. Common challenges include:

• Resistance to Change: Teams may be reluctant to shift from familiar structures.
• Replatforming Efforts: Moving to modular architectures can require significant upfront investment.

In a rare case, I’ve witnessed Conway’s Law create technical debt that couldn’t be addressed in time, ultimately impacting the company’s survival. The lesson? Address these issues early and gradually.

A phased approach works best:

1. Start with a pilot team organized around a single domain.
2. Implement modular architectures for that domain and measure the impact on cloud costs.
3. Scale the reorganization across the company based on initial learnings.

Conclusion

Conway’s Law is more than an observation about software - it’s a roadmap for aligning team structures with architectural and financial goals. By organizing teams around domains rather than technical layers, you can build cleaner architectures, reduce cloud costs, and accelerate innovation.

As engineering leaders, we must recognize the strategic importance of team structures. They shape our software, and our software shapes our costs. Get this alignment right, and everything else becomes easier.

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