With $39.5 billion projected to be spent on Infrastructure as a Service (IaaS) this year, many cloud users will find it’s time to optimize spend with an IaaS cost management tool. With so many different options to choose from – picking the right one can be overwhelming. While evaluating your options, you should have an idea of what would be most compatible for you and your organization. In order to cut cloud costs and waste, make sure you look for these 5 things while picking an IaaS cost management tool.
1. UI is Easy to Understand
When adopting a new piece of software, you should not be stressed out trying to figure out how it works. It should be designed around the end user in order to give them an easy user experience so they can accomplish tasks quickly. Many native tools required by the cloud providers require specialized coding knowledge that the IaaS users in your organization may not have. Whether it is useful or not depends on how simple and easy to follow it is so that every cloud user can contribute to the task of managing IaaS cost.
2. Improved Visibility
It is essential that you have all of your information available to you in one place – this helps make sure you didn’t overlook anything. Seeing all your resources on one screen, all at once, will allow you to pinpoint strengths/weaknesses you need to focus on to that will help manage your IaaS cost. Of course, cost management includes more than visibility, which leads to the next points.
3. Provides Reporting
You want your organization to be well informed, so it is important that any IaaS cost management tool you adopt includes the ability to generate cost and savings reports. You can’t change something if you don’t know what it means, the data gathered – past and present – will help you understand the past and make a forecast for the future. These reports will give you the information you need to make quick, informed decisions. Preferably, they contain automated recommendations as well based on your resource utilization history and patterns. Additionally, it’s important for any cost optimization tool to report on the amount of money you have saved using it, so you can justify the cost of the tool as needed to your management or Finance department.
4. Implements actions
After gathering the data and making suggestions, the next step in cost optimization is to actually make these changes. Using the reports and data gathered, the tool should be able to manage your resources and implement any necessary changes without you having to do anything.
5. Automation and APIs
Even though it goes on in the background, APIs are necessary because they allow your tool to work in conjunction with other operations. With the support of inbound actions and outbound notifications, this automated process allows you to streamline all of your data. This will make things faster and more efficient – allowing you to cut down on time and IaaS cost. Highlights to look for include Single Sign-On, ChatOps integrations, and a well-documented API.
Keep Your Organization’s IaaS Cost Needs in Mind
These are just a few of the things you should be looking for when searching for IaaS cost optimization – but you have to find the platform that works best for you!
ParkMyCloud automatically optimizes your IaaS costs with these principles in mind – try it out with a 14-day free trial and see if it’s the right fit for you.
Lately, many of our AWS customers (especially those purchasing through the AWS marketplace) have mentioned that they are using an AWS EDP, which stands for Amazon Web Services Enterprise Discount Program. Essentially, this is AWS’s way to provide enterprises a discount off its services based on a volume (consumption) commitment.
How does an AWS EDP work?
A simple application of an AWS EDP would work as follows: for the next 3 years, you commit to spend $5MM on AWS services, and receive a 13% discount. Even if you don’t spend $5MM you still owe them $5MM, and of course if you go over you would get billed for the overage.
AWS’s website does not provide a lot of information about these agreements. Here’s what they say: “Customers also have the option to enroll in an Enterprise Agreement with AWS. Enterprise Agreements give customers the option to tailor agreements that best suit their needs. For additional information on Enterprise Agreements please contact your sales representative.”
What Other Agreements Compare to an AWS EDP?
Going back to my days at IBM, we used to generally refer to discount contracts as Enterprise License Agreements (ELAs). An ELA is a software site license that is sold to large enterprises. It typically allows for unlimited use of a single or multiple software products throughout the organization, although there were often some restrictions and limitations. During my time at IBM, these were sold upfront for a set dollar amount and term, generally 3 to 5 years and usually had a cap on usage, so at some point overages could kick in – which would help with the renegotiation, of course.
Other terms used with a similar concept include Site License, Enterprise Agreement (this is a common Microsoft term – EA), Volume Purchase Agreement (VPA) and All You Can Eat (AYCE). What all of these have in common is that the vendor gets a large revenue/spend commit, and the enterprise gets discounting and flexibility.
How Else can you Get Discounts on AWS?
AWS does provide enterprises with multiple ways to consume its services based on their business needs and get volume discounts. Traditional on-demand instances allow you to pay for capacity by the hour without any long-term commitments or upfront payments. Reserved instances are ideal for applications with steady-state or predictable usage and can provide up to a 75% discount compared to on-demand pricing. And of course they promote scale groups, spot instances, and other optimization efforts to reduce spend and waste but those are more cost control opportunities then they are discounts. Plus, you can always wait for better pricing.
Should You Use an AWS EDP?
Before committing to an AWS EDP, ensure that your organization will consume the amount of resources you are committing too. Keep in mind that this can also include the AWS Marketplace. The third party solutions you can buy on the AWS Marketplace also count against your AWS EDP, and leverage that discount structure — so before completing a third-party transaction, make sure you check the Marketplace to see if the cloud solution you buy is listed there.
There has been a rush of cloud management acquisitions lately, with VMware, Apptio, and Flexera making major acquisitions in the last three months alone (and more to follow). I thought it would be useful to compile a centralized list, so we can take a look at the trends in this market and why these acquisitions are accelerating.
The Multi-Faceted Cloud Management Industry
First, let’s be clear: the cloud management industry is broad and a bit ambiguous but as it matures industry analysts have begun to define specific categories. We found the below put together by Gartner in a recent blog:
ParkMyCloud fits into the “Cost Management and Resource Optimization” category, which in and of itself is broad, but in a nutshell these vendors help enterprises monitor, manage, govern and control cloud spend in a variety of ways. The other category we find intriguing is “Provisioning and Orchestration”. That’s where we feel a lot of the DevOps tools fit, and that is the go-to-market model we like to fashion ourselves after — technical user/buyer, self-service trials, SaaS, and freemium model.
Cloud Management Acquisitions, 2013-2018
So it should be no surprise that we have collected the following data points listed below – we would welcome your feedback on others we should add to this list.
|Relus Cloud||2013||2018||MSP||–||Cloud Reach||–|
|Cloud Technology Partners||2009||2017||MSP||$34MM||HPE||N/A|
In the last 45 days or so the cloud management platform (CMP) space has been hyperactive as VMware acquired CloudHealth, Apptio acquired FittedCloud, and Flexera acquired Rightscale. Good news for all but we are most excited for CloudHealth given we are a commercial and technology partner with them.
What These Cloud Management Acquisitions Tell Us about The State of Public Cloud
So what does this tell us about the cloud management space, and in particular the cost management and optimization space? We have some opinions:
- Multi-cloud is truly here. The benefit of these cloud management tools is that they are agnostic and can help enterprises manage and optimize AWS, Azure and Google services alike.
- Companies like Cisco, HPE and VMware understand the importance of being in the public cloud game, each basically failed at competing against AWS et. al. head on, so they are now ensuring they have tools that help enterprises manage public, private, hybrid and multi-cloud services.
- The cost management portion of cloud management is always a “top 3” concern of CIOs and CTOs according to any cloud survey published, so cloud cost optimization is front in center in enterprise IT and ISVs must be able to address this concern.
Clearly, cloud management acquisitions will continue, and new solutions and companies will evolve as this market grows and matures. The cloud providers are launching new services at a rapid pace, and like any large scale utility there needs to be tools to help manage, govern, secure, and optimize these existing and new services.
There’s a simple fact for public cloud users today: you need to use cloud agnostic tools. Yes – even if you only use one public cloud. Why? This recommendation comes down to a few drivers that we see time and time again.
You won’t always use just this cloud
There is an enterprise IT trend to multi-cloud and hybrid cloud – such a prevalent trend that even if you are currently single-cloud, you should plan for the eventuality of using more than one cloud, as the multi-cloud future has arrived. Dave Bartoletti, VP and Principal Analyst at Forrester Research, who broke down multi-cloud and hybrid cloud by the numbers:
- 62 percent of public cloud adopters are using 2+ unique cloud platforms
- 74 percent of enterprises describe their strategy as hybrid/multi-cloud today
In addition, standardizing on cloud agnostic tools also can alleviate costs associated with policy design, deployment, and enforcement across different cloud environments. Management and monitoring using the same service platform greatly reduces the issue of mismatched security policies and uncertainty in enforcement. Cloud agnostic tools that also operate in the context of the data center — whether in a cloud, virtualized, container, or traditional infrastructure — are a boon for organizations who need to be agile and move quickly. Being able to reuse policies and services across the entire multi-cloud spectrum reduces friction in the deployment process and offers assurances in consistency of performance and security.
How do you decide what tools to adopt?
We talk to different size enterprises using the cloud on a daily basis, and always ask if they are using cloud native tools, or if they are using third party tools that are cloud agnostic. The answer – it’s a mix to be sure, often it’s a mix between cloud-native and third-party tools within the same enterprise.
What we hear is that managing the cloud infrastructure is quite a complex job, especially when you have different clouds, technologies, and a diverse and opinionated user community to support. So a common theme with many of the third-party tools we see used tend to include freemium models, a technology someone used at a previous company, tools recommended by the cloud services provider (CSP) themselves, and open-API-driven solutions that allow for maximum automation in their cloud operations. It also serves the tools vendors well if deploying the tool includes minimum effort — in other words, SaaS tools that do not require a bunch of services and integration work. Plug and play is a must.
For context, here at ParkMyCloud support AWS, Azure, Google and Alibaba clouds, and usually talk to DevOps and IT Ops folks responsible for their cloud infrastructure. And those folks are usually after cloud cost control and governance when speaking with us. So our conversations tend to focus on the tools they use and need for cloud infrastructure management like CI/CD, monitoring, cost control, cost visibility and optimization, and user governance. For user governance and internal communication, Single-sign On and ChatOps are must have.
So we decided to compile a list of the most common clouds and tools we run across here at ParkMyCloud, in order of popularity:
- Cloud Service Provider
- AWS, Google Cloud, Microsoft Azure, Alibaba Cloud – and we do get requests for IBM and Oracle clouds
- Infrastructure Monitoring (not APM)
- Cloud Native (AWS CloudWatch, Azure Metrics, Google Stackdriver), DataDog, Nagios, SolarWinds, Microsoft, BMC, Zabbix, IBM
- Cost Visibility and Optimization
- CloudHealth Technologies, Cloudability, Cloudyn/Azure Cost Management, Apptio
- CI/CD + DevOps (this is broad but these are most common names we hear that fit into this category)
- Cloud Native, CloudBees Jenkins, Atlassian Bamboo, HashiCorp, Spinnaker, Travis CI
- Single Sign-On (SSO)
- ADFS, Ping, Okta, Azure AD, Centrify, One Login, Google OAuth, JumpCloud
- Slack, Microsoft Teams, Google Hangouts
- Cloud Cost Control
- Cloud Native/Scripter, ParkMyCloud, GorillaStack, Skeddly, Nutanix (BotMetric)
Beat the curve with cloud agnostic tools
Our suggestion is to use cloud agnostic tools wherever possible. Our experience tells us that a majority of the enterprises lean this way anyways. The upfront cost in terms of license fee and/or set up could be more, but we think it comes down to (1) most people will end up hybrid/multi-cloud in the future, even if they aren’t now, and (2) cloud agnostic tools are more likely to meet your needs as a user, as the companies building those tools will stay laser-focused on supporting and improving said functionality across the big CSPs.
Lately, we have been talking to quite a few providers of cloud managed services that play in both the private and public cloud spaces. These conversations have centered around how cloud management needs are evolving as enterprises’ hybrid and multi-cloud needs have accelerated.
Most refer to this market as cloud managed services (for once, no acronym associated), and many of these managed service providers (MSPs) also sell migration services to bring customers from private to public cloud, and cloud services between Amazon Web Services (AWS), Microsoft Azure, and Google Compute Platform (GCP). So these MSPs can help you move your applications to the cloud, sell you the cloud services you’re using, and manage and optimize your cloud services. It’s a rapidly growing market with a lot of M&A activity as MSPs race to provide differentiated cloud managed services that enable them to help enterprises get to market faster, better, and cheaper.
The global cloud managed services market size is expected to reach USD 82.51 billion by 2025, according to a study conducted by Grand View Research, Inc. Enterprises are focusing on their primary business operations, which results in higher cloud managed services adoption. Business services, security services, network services, data center services, and mobility services are major categories in the cloud managed services market. Implementation of these services will help enterprises reduce IT and operations costs and will also enhance the productivity of those enterprises.
Taking a step back, I had a look at Wikipedia to make sure we were all aligned on what managed services provider are and cloud management is (cloud managed services):
- A managed services provider is most often an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to its clients either proactively or as the MSP (not the client) determines that services are needed.
- Cloud management means the software and technologies designed for operating and monitoring applications, data and services residing in the cloud. Cloud management tools help ensure cloud computing-based resources are working optimally and properly interacting with users and other services.
Cloud managed services enable organizations to augment competencies that they lack, or to replace functions or processes that incurred huge recurring costs. These services optimize recurring in-house IT costs, transform IT systems and automate business processes allowing enterprises to achieve their business objectives.
The “net net” is that MSPs providing managed cloud services enable enterprises to adopt and manage their cloud services more efficiently.
In March 2018 Gartner published a Magic Quadrant for Public Cloud Infrastructure Managed Service Providers if your interested to see who they rank as the best of the best in when implementing and operating solutions on AWS, Azure and GCP (note this includes multi-cloud but not hybrid cloud). Several large SI’s are on the list like Accenture, Capgemini, and Deloitte, along with newer born in the cloud pure play MSPs like 2ndWatch, Cloudreach and REANcloud.
What’s interesting to us about this list is the recent M&A activity we have seen with many of these companies, here’s a few we were able to remember over a beer (shout out to Crooked Run Brewery in Sterling, VA):
As you can see, there is a clear bias towards buying “born in the cloud”, public cloud focused MSPs, as that’s where the lack of enterprise expertise lies, and of course the hyper growth is occurring as companies migrate from private to public cloud. Many of these providers started off supporting just AWS, and now need to or have begun supporting Azure and Google as well to support The “big 3” cloud service providers in this new, and emerging multi-cloud world.
MSPs that want to get into the cloud managed services game need to realize the pains are different in the public cloud, and that their focus needs to be on helping enterprises with security and governance, managing cloud spending, the lack of resources/expertise, and the ability to manage multi-cloud.