Cloud spend optimization is always top of mind for public cloud users. It’s usually up there with Security, Governance, and Compliance – and now in 2020, 73% of respondents to Flexera’s State of the Cloud report said that ‘Optimize existing use of cloud (cost savings)’ was their #1 initiative this year.
So – what the heck does that mean? There are many ways to spin it, and while “cost optimization” is broadly applicable, the strategies and tactics to get there will vary widely based on your organization and the maturity of your cloud use.
Having this discussion within enterprises can be challenging, and perspectives change depending on who you talk to within an organization – FinOps? CloudOps? ITOps? DevOps?. And outside of operations, what about the Line of Business (LoB) or the Application owners? Maybe they don’t care about optimization in terms of cost but in terms of performance, so in reality optimization can mean something different to cloud owners and users based on your role and responsibility.
Ultimately though, there are a number of steps that are common no matter who you are. In order to facilitate this discussion and understand where enterprises are in their cloud cost optimization journey, we created a framework called the Cloud Cost Optimization Maturity Curve to identify these common steps.
Cloud Spend Optimization Maturity Curve
While cloud users could be doing any combination of these actions, this is a representation of actions you can take to control cloud spend in order of complexity. For example, Visibility in and of itself does not necessarily save you money but can help identify areas ripe for optimization based on data. And taking scaling actions on IaaS may or may not save you money, but may help you improve application performance through better resource allocation, scaling either up (more $$$) or down (less $$$).
Let’s dig into each in a little more detail:
- Visibility – visibility of all costs across clouds, accounts, and applications. This is cloud cost management 1.0, the ability to see cost data better through budgeting, chargeback, and showback.
- Schedule suspend – turn off idle resources like virtual machines, databases, scale groups, and container services when not being used, such as nights and weekends based on usage data. This is most common for non-production resources but can have a big bang in terms of savings – 65% savings is a good target that many ParkMyCloud customers achieve even during a free trial.
- Delete unused resources – this includes identifying orphaned resources and volumes and then deleting them. Even though you may not be using them, your cloud provider is still charging you for them.
- Sizing IaaS (non-production) – many enterprises overprovision their non-production resources and are using only 5-10% of the capacity of a given resource, meaning 90% is unused (really!) so by leveraging usage data you can get recommendations to resize those under utilized resources to save 50% or more.
- RI / Savings Plan Management – AWS, Azure, and Google provide the ability to pre-buy capacity and get discounts ranging from 20-60% based on your commitments in both spend and terms. While the savings make it worthwhile, this is not a simple process (though it’s improved with AWS’s savings plans) and requires a very good understanding of the services you will need 12-36 months out.
- Scaling IaaS (prod) – this requires collecting data and understanding both the infrastructure and application layers and taking sizing actions up or down to improve both performance and cost. Taking these actions on production resources requires strong communication between Operations and LoB.
- Optimizing PaaS – virtual machines, databases, and storage are all physical in nature and can be turned off and resized, but these top the maturity curve since many PaaS services have to be optimized in other ways like scaling the service up/down based on usage or rearchitecting parts of your application.
For more ways to reduce costs, check out the cloud waste checklist for 26 steps to take to eliminate wasted spend at a more granular level.
Today, if you can believe it, ParkMyCloud is 5 years old. Our company anniversary is always a good opportunity to take a step back and see where we’ve been and take a look ahead.
A lot has changed in the past 5 years. In 2015, “public cloud” was practically synonymous with “AWS” – and the size of the entire IaaS market was $11 billion. In 2020, we estimate that more than that amount will be spent – and wasted – on idle resources alone, with IaaS revenue of about $50 billion. Azure and Google have become preferred options for many enterprises. While AWS still dominates, it’s at a mere 32% of the market compared with 70% in 2015. Services we use every day, like Fargate and Kubernetes, didn’t exist 5 years ago.
And yet, a lot has stayed the same. Public cloud is still growing. Cost optimization is still a concern – in fact, the top initiative for most cloud users.
So perhaps it’s not surprising that not too much has changed from the original mission statement we set out to achieve: simplifying cloud cost reduction. In fact, this all still rings true (except, of course, expanding beyond compute):
“We decided to take on the biggest challenge enterprises of any size face in using cloud services – controlling an ever-growing bill. But we wanted to do it in a simple, elegant, and cost-effective way, so customers could be up and running within 15 minutes, reducing their cloud computing services spending by the next day and achieving payback in less than one month.”
In pursuit of that goal, we’ve hit some exciting milestones this year – from more than $50 million saved on public cloud by our customers to being rated #1 in user satisfaction among cloud cost management platforms. We have been united with Turbonomic for a full year, and continue to onboard new customers, continually finding opportunities to optimize cloud costs through scheduling, rightsizing, and more on compute, databases, storage, and containers.
First and foremost we want to thank our amazing customers. These include a number who joined us a couple of weeks after launching and have been with us throughout. Others came aboard at different times during the last five-years and to all we are truly grateful. We have been provided with constant feedback and whenever we have reached out for support or advice on new feature development we have been provided with wonderful advice.
Of course, anyone who knows me knows we won’t linger on celebration when there’s more to look forward to. We have plenty of news coming down the pipe. We’ll continue to add optimization support for more IaaS and PaaS services across all three of the major cloud providers. We’ll have new integrations to announce to streamline our customers’ end-to-end public cloud optimization journey. And, we’re always striving to improve our user experience and make ParkMyCloud as easy to use for you and your team as possible. If you have suggestions – we’re all ears. It’s all about the ROI!
So, happy 5th birthday, ParkMyCloud. The journey to cloud optimization continues.
We speak to enterprises large and small about cloud cost optimization, and one of the more dominant themes we have been hearing lately is: who should manage app development costs? Cloud Operations teams (ITOps, DevOps, FinOps, Cloud Center of Excellence, etc.) that are responsible for the management, governance and optimization of an enterprise’s cloud resources need to get the Application owners or the lines of business owners to be responsible for cost. It can’t simply be the centralized cloud team who cares about cost. Folks using cloud services on a daily basis for engineering, development, QA, testing, etc. need to take actions related to optimizing cloud costs, managing user governance and security operations.
I liken this a bit to the response to the COVID-19 pandemic given this is the event that has defined 2020. The Federal Government can collect data from across the country, provide resources and publish guidelines but ultimately the State Governments need to take the actions to shut down schools and non-essential businesses, and certain counties or jurisdictions within those states can even decide if they will adhere to the state guidelines, there could be very good reasons they don’t based on data or essential businesses. We see the same underlying process in enterprises when it comes to cloud cost optimization and management.
Let’s play this out.
Cloud spend has become the largest single IT cost outside of labor and is growing 10-15% month on month. So, the CloudOps team is given a directive from Finance and/ or IT Management to find tools or solutions to identify cloud waste and control cloud spend primarily in AWS, Azure and Google clouds.
Then, the CloudOps team researches tools, both 3rd party and native cloud provider tools, and finds a couple important things:
- If the enterprise is multi-cloud, the native CSP tools are a non-starter
- Tools must be data-driven, so the recommendations to reduce the app development cost are believable and actually useful
- The tools must be self-service, i.e., the application owners or the lines of business need to be able to take the actions. Otherwise, they will deem CloudOps as being draconian (and push back because they know their app better … sounds like the States).
Next, CloudOps brings in a tool to do a pilot. It starts small with a sandbox account, but as data and trust build, the pilot expands to include many AWS, Azure, and/or GCP accounts that are used by the application owners. Then CloudOps determines a “friendly” line of business where the app development cost owner is keen to identify waste, reduce costs, and increase their cloud efficiency.
CloudOps and the cloud optimization vendor provide a demo to the app owners using their own data and showing them where they have waste, such as idle resources, over-provisioned resources, orphaned resources, resources that could leverage reservations, and so forth. The app owners are intrigued and are keen to understand if they are the master of their own domain.
- Where is this data coming from? Is it reliable?
- Can we take our own actions? Is this self-service?
- What about user governance? My QA team does not need to manage resources that belong to dev or staging. Can we reject a recommendation because the app we are running requires that configuration?
- Can we group resources into application stacks and manage them as a single entity?
- Can we override an action?
In order to effectively manage the app development cost, CloudOps needs to involve the owners and users of those applications and provide them with the data and tools to make decisions and take actions. The cloud is self-service, so in order to effectively manage your cloud services, you need the optimization and governance tools to also be self-service and adapt to the needs of each business unit within your organization.
Usually when we think of the cloud, we think of computers and databases and stuff someplace far away. It “just works” (usually) and we do not think of the numerous folks that maintain it and countless people that use it.
But it has a different feel now, as folks around the world are hunkering down at home or in crisis command centers, facing the new realities COVID-19 has brought us, and how its impact continues to evolve and develop.
Paradoxically, while we’re physically further apart than ever before – we’re also drawn closer together, as we focus on this global health crisis and the rippling effects throughout all countries and industries. So let me pull aside this digital curtain for a moment, and say hello directly.
I’m aware that you, our customers and followers, are facing challenges you’ve never faced before. Those challenges will vary, from wild fluctuations in supply chains; to enormous digital demand on the technologies and platforms that enable us to stay connected (Zoom, Slack), fed (Instacart, UberEats), and healthy (Teladoc, Amwell).
From our little ParkMyCloud corner of the world – we would like to do what we can to help you and your business. Our values are built around cost optimization, simplifying complex problems, and transparency (or as I like to say, keeping things real.) These are all important more than ever today as we respond and reshape our operations, while maintaining trust with employees and customers.
If you want or need to save money in these times, we would like to help. Let us know and we can walk through your cloud environment together and give you some suggestions. And not just about how our software can help – we’ve collected a lot of knowledge about saving money in public cloud from some great companies and are happy to share where it might be able to help you. As always, ParkMyCloud’s cost optimization software is free to try. If you need a trial longer than 14 days, or need access to features above your current tier, please let me know.
And if there’s anything more we can do to assist you, we’re all ears. We’re all on the same team.
There is a growing job function among companies using public cloud: the Enterprise Cloud Manager. We did a study on ParkMyCloud users which showed that a growing proportion of them have “cloud” or the name of their cloud provider such as “AWS” in their job title. This indicates a growing degree of specialization for individuals who manage cloud infrastructure as demonstrated by their cloud computing job titles. And, in some companies, there is a dedicated role for cloud management – such as an Enterprise Cloud Manager.
Why would you need an Enterprise Cloud Manager?
The world of cloud management is constantly changing and becoming increasingly complex even for the best cloud manager. Recently, the increased adoption of hybrid and multi-cloud environments by organizations to take advantage of best-of-breed solutions, make it more confusing, expensive, and even harder to control. If someone is not fully versed in this field, they may not always know how to handle problems related to governance, security, and cost control. It is important to dedicate resources in your organization to cloud management and related cloud job roles. This chart from Gartner gives us a look at all the things that are involved in cloud management so we can better understand how many parts need to come together for it to run smoothly.
Having a role in your organization that is dedicated to cloud management allows others, who are not specialized in that field, to focus on their jobs, while also centralizing responsibility. With the help of an Enterprise Cloud Manager, responsibilities are delegated appropriately to ensure cloud environments are handled according to best practices in governance, security, and cost control.
After all, just because you adopt public cloud infrastructure does not mean you have addressed any governance or cost issues – which seems rather obvious when you consider that there are sub-industries created around addressing these problems, but you’d be surprised how often eager adopters assume the technology will do the work and forget that cloud management is not a technological but a human behavior problem.
And someone has to be there to bring the motivational bagels to the “you really need to turn your instances off” meeting.
A Larger Approach: The Cloud Center of Excellence
Cohesively, businesses with a presence in the cloud, regardless of their size, should also consider adopting the functionalities of a Cloud Center of Excellence (CCoE) – which, if the resources are available, can be like an entire department of Enterprise Cloud Managers. Essentially, a CCoE brings together cross-functional teams to manage cloud strategy, governance, and best practices, and serve as cloud leaders for the entire organization.
The role of an Enterprise Cloud Manager or cloud center of excellence (or cloud operations center or cloud enablement team, whatever you want to call it) is to oversee cloud operations. They know all the ins and outs of cloud management so they are able to create processes for resource provisioning and services. Their focus is on optimizing their infrastructure which will help streamline all their cloud operations, improve productivity, and optimize cloud costs.
Moreover, the Enterprise Cloud Manager can systematize the foundation that creates a CCoE with some key guiding principles like the ones outlined by AWS Cloud Center of Excellence here.
With the Enterprise Cloud Manager leadership, DevOps, CloudOps, Infrastructure, and Finance teams within the CCoE can ensure that the organization’s diverse set of business units are using a common set of best practices to spearhead their cloud efforts while keeping balanced working relationships, operational efficiency, and innovative thinking needed to achieve organizational goals.
A Note on Job Titles
It’s worth noting that while descriptive, the “Enterprise Cloud Manager” title isn’t necessarily something widely adopted. We’ve run across folks with titles in Cloud Manager, Cloud Operations Manager, Cloud Project Manager, Cloud Infrastructure Manager, Cloud Delivery Manager, etc.
If you’re on the job hunt, we have a few other ideas for cloud and AWS jobs for you to check out.
Automation Tools are Essential
With so much going on in this space, it isn’t possible to expect just one person or a team to manage all of this by hand – you need automation tools. The great thing is that these tools deliver tangible results that make automation a key component for successful enterprise cloud operations and work for companies of any size. Primary users can be people dedicated to this full time, such as an Enterprise Cloud Manager, as well as people managing cloud infrastructure on top of other responsibilities.
Why are these tools important? They provide two main things: visibility and action to act on those recommendations. (That is, unless you’re willing to let go of the steering wheel and let the platform make the decisions – but most folks aren’t, yet.) Customers that were once managing resources manually are now saving time and money by implementing an automation tool. Take a look at the automation tools that are set up through your cloud vendor, as well as third-party tools that are available for cost optimization and beyond. Setting up these tools for automation will lessen the need for routine check-ins and maintenance while ensuring your infrastructure is optimized.
Do we really need this role?
To put it simply, if you have more than a handful of cloud instances: yes. If you’re small, it may be part of someone’s job description. If you’re large, it may be a center of excellence.
But if you want your organization to be well informed and up to date, then it is important that you have the organizational roles in place to oversee your cloud operations – an Enterprise Cloud Manager, CCoE and automation tools.