16 Tips to Manage Cloud Costs

16 Tips to Manage Cloud Costs

Looking for ways to manage cloud costs? If you use the cloud, the answer should always be yes.  If you don’t have proper management of your cloud spend, then you could end up spending more than you actually need to. We’ve compiled a list of tips/best practices that will help guide you to track and rightsize cloud spend and align capacity and performance to actual demand so your cloud environment is optimized.

1. Start with the Organizational Problem

It’s easy to find lots of specific ways to reduce and manage public cloud costs – and we have plenty of those to share. But let’s start with the core issue. Public cloud resources are provisioned and used throughout organizations – and governance and budgeting are organizational issues. You need to start at the root of the problem: who is responsible for what cloud costs? And how do you evaluate whether those costs are acceptable – or need to be addressed for wasted spend?

Many organizations solve this problem with a dedicated enterprise cloud manager or cloud center of excellence, a person or department (depending on the size of the organization and extent of cloud deployment) dedicated entirely to the use of cloud by employees, with cost a major focus. 

Ultimately, it’s an issue of economics – and you need to think of it that way. 

2. Get Familiar with the Cloud-Native Management Tools

The major public cloud providers offer native resource and cost management tools. Since you’re already enmeshed in their infrastructure offerings, it makes sense to evaluate the options within the cloud portals.

For example, on the issue of resource on/off scheduling, AWS, Azure, and Google Cloud each offer a tool. However, they have limitations – ignoring resource types that may benefit from scheduling, not providing actions, and providing data but not recommendations, to name a few. Here is a quick rundown of each of those tools and what they include.

Another example is the AWS Compute Optimizer – a big name in promise, and certainly worth reviewing for AWS users.

3. But, Know that Cloud Providers Won’t Solve All the Problems they Create

Enter the realm of third-party software. Whether because cloud providers don’t actively want you to save money (you might guess this is the case, but they want their services to be “sticky” and therefore promote cost optimization options) or because it’s simply not a revenue driver for them, cloud cost management is often an afterthought for cloud providers. We’re seeing a change in the winds as providers turn toward built-in savings options (for example, Google Cloud’s sustained use discounts), but cloud resource provisioning and optimization are a wild, ever-changing beast that cloud providers aren’t keeping up with.

That’s why it may be time to… 

4.  Find a Cost Management Tool That Fits Your Needs

As IT infrastructure changes organizations need for tools and processes dedicated to cloud cost management and cost control have become a necessity.  Using third-party tools for cloud optimization help with cost visibility and governance and cost optimization. Make sure you aren’t just focusing on cost visibility and recommendations, but find a tool that takes that extra step and takes those actions for you. 

It’d be beneficial to find a tool that can work with multiple clouds, multiple accounts within each cloud and in multiple regions within each account so you can view recommendations across all your accounts in one place in one easy to use interface. This added visibility and insight helps simplify managing cloud costs.  

By the way – automation is key. By including cost optimization software in your cloud strategy, organizations eliminate the need for developers to write scheduling scripts and deploy them to fit a specific team´s requirements. This automation reduces the potential for human error and saves organizations time and money by allowing developers to reallocate their time to more beneficial tasks. 

5. Get Visibility on Your Bill

If you’re going to manage your cloud costs better, you need to understand where your spending is going. Here’s a guide to get a consolidated billing view in AWS.

Relatedly, you’re also going to need to understand what each resource is for – which means you need a robust labeling strategy. 

6. Use a Resource Tagging Strategy to Better Manage Cloud Costs 

Tags are labels or identifiers that are attached to your instances. This is a way for you to provide custom metadata to accompany the existing metadata, such as instance family and size, region, VPC, IP information, and more. This helps manage your cloud costs by sorting, searching and filtering through your cloud environment. 

With the application of tagging best practices in place, you can automate governance, improve your workflows and make sure your costs are controlled. Additionally, there are management and provisioning tools that can automate and maintain your tagging standards.

In ParkMyCloud, our software reads the names and tags assigned to VMs and recommends which are suitable for scheduling (“parking”). 

7. Identify Idle/Underutilized Resources

Okay, so that’s how you get to the step of optimizing costs. So what are the ways you can actually manage cloud costs and optimize spending?

The easiest way to quickly and significantly reduce cloud costs is to identify resources that are not actually being used (typically in non-production environments).

Examples of resources that you may leave idle are; On-Demand Instances/VMs, Relational Databases, Load Balancers and Containers.

Once you’ve identified them, then you can schedule them to turn off when not needed,  or as we like to say, “park” them. 

By setting schedules for your instances to turn off when they are typically idle, you are eliminating potential cloud waste and saving you money on your cloud bill. Typically, schedules would turn off instances between the hours of 7:00 pm and 9:00 am on weekdays and on weekends. This way you don’t have to worry about manually turning on and off instances when you aren’t using them. By keeping workloads on just during business hours, you can save around 65% on your cloud bill

8. Rightsize Your Instances

Another major source of cloud waste is oversized resources. When you RightSize you are matching a workload to the best supporting virtual machine size, helping you optimize costs. This is important because many virtual machines in the cloud are sized much larger than necessary for the workloads running on them – a single instance change can save 50% or more of the cost. (Try it free to see how much you can save.) 

9. Know Your Purchasing Options & Discounts Offered by Cloud Providers – Starting with Reserved Instances

Each of the ‘big three’ cloud providers offer an assortment of purchasing options to lower costs from the listed On-Demand prices. 

For example, AWS Reserved Instances, Azure Reserved Virtual Machine Instances, and Google Committed Use Discounts allow customers to purchase compute capacity in advance in exchange for a discount. 

10. And Spot Instances

Another discounting mechanism is the option that lets you purchase unused capacity for a steep discount – in AWS these are referred to as spot instances, low-priority VMs in Azure, and preemptible VMs in Google. 

11. Don’t Miss Sustained Use Discounts

Google also offers a unique cost-savings option that AWS and Azure don’t – Sustained Use Discounts.

12. Use AWS’s New Savings Plans

You’re probably familiar with AWS Reserved Instances. But have you been following along with the Savings Plans announced at re:Invent? If you use 

According to both our CTO and Corey Quinn, you should run, not walk, to the AWS portal to get your hands on some savings plans to better manage cloud costs. 

Plus, you can now use savings plans to save up to 17% on Lambda workloads, per an announcement last week

13. Review Your Contracts 

Another sort of “purchasing option” is related to contract agreements. All three major cloud providers offer enterprise contracts. Typically, these are to encourage large companies to commit to specific levels of usage and spend in exchange for an across-the-board discount – examples of this would be AWS EDPs and Azure Enterprise Agreements

14. Make Sure You’re Using Lambda Efficiently

It can be easy to get caught up while building Lambda based applications that you forget to optimize and plan for the costs Lambda will incur. While it may be cheap and easy to build these applications, if you run heavy workloads without taking costs into account, you’ll end up running up your bill.  

Continuously keeping track of spend, monitoring usage and understanding its behavior is essential to keeping Lambda costs controlled and optimized.

15. Review Credit Options

Each of the cloud providers offers ways to get credits you can put toward your bill. By offering these credits, Google Cloud, Azure and AWS are trying to make it easy and in some cases free to get started using their cloud platforms.  

16. Keep Your Instance Types Up to Date

Did you ever think that simply modernizing your VMs and databases to make sure they are running on the latest instance family can save you money?  

Cloud providers incentivize instance modernization by pricing the newest generations the lowest. Typically, new instance families come out with newer CPU types, but can also refer to networking or memory improvements as well. 

So you get a cheaper price (10-20% discount) and better performance – modernizing your instances is almost a no brainer. 

 

…and the list goes on. Managing cloud costs can seem like a daunting task but it doesn’t have to be! Follow these tips and start optimizing your cloud environment.

Got any tips we should add? Let us know in the comments below!

7 Favorite AWS Training Resources

7 Favorite AWS Training Resources

When it comes to AWS training resources, there’s no shortage of information out there. Considering the wide range of videos, tutorials, blogs, and more, it’s hard knowing where to look or how to begin. Finding the best resource depends on your learning style, your needs for AWS, and getting the most updated information available. Whether you’re just getting started in AWS or consider yourself an expert, there’s an abundance of resources for every learning level. With this in mind, we came up with our 7 favorite AWS training resources, sure to give you the tools you need to learn AWS:

1. AWS Self-Paced Labs

What better way to learn that at your own pace? AWS self-paced labs give you hands-on learning in a live AWS environment, with AWS cloud services, and actual scenarios you would encounter in the cloud. There are two different ways to learn with these labs. You can either take an individual lab or follow a learning quest. Individual labs are intended to help users get familiar with an AWS service as quickly as 15 minutes. Learning quests guide you through a series of labs so you can master any AWS scenario at your own pace. Once completed, you will earn a badge that you can boast on your resume, LinkedIn, website, etc. 

Whatever your experience level may be, there are plenty of different options offered. Among the recommended labs you’ll find an Introduction to Amazon Elastic Compute Cloud (EC2), and for more advanced users, a lab on Maintaining High Availability with Auto Scaling (for Linux).

2. AWS Free Tier

Sometimes the best way to learn something is by jumping right in. With the AWS Free Tier, you can try AWS services for free. This is a great way to test out AWS for your business, or for the developers out there, to try services like AWS CodePipeLine, AWS Data Pipeline, and more. While you are still getting a hands-on opportunity to learn a number of AWS services, the only downside is that there are certain usage limits. You can track your usage with a billing alarm to avoid unwanted charges, or you can try ParkMyCloud and park your instances when they’re not in use so you get the most out of your free tier experience. In fact, ParkMyCloud started its journey by using AWS’s free tier!

3. AWS Documentation and Whitepapers

AWS Documentation is like a virtual encyclopedia of tools, terms, training, and everything AWS. You’ll find case studies, tutorials, cloud computing basics, and so much more. This resource is a one-stop-shop for all of your AWS documentation needs, whether you’re a beginner or advanced user. No matter where you are in your AWS training journey, AWS documentation is always a useful reference and certainly deserves a spot in your bookmarks. 

Additionally, you’ll find whitepapers that give users access to technical AWS content that is written by AWS and individuals from the AWS community, to help further your knowledge of their cloud. These whitepapers include things from technical guides, reference material, and architecture diagrams.

4. YouTube

So far, we’ve gone straight to the source for 3 out of 7 of our favorite AWS training resources. Amazon really does a great job of providing hands-on training, tutorials, and documentation for users with a range of experience. However, YouTube opens up a whole new world of video training that includes contributions from not only Amazon, but other great resources as well. Besides the obvious Amazon Web Services channel, there are also popular and highly rated videos by Edureka, Simplilearn, Eli the Computer Guy, and more.

5. Bloggers

As cloud technology usage continues to expand and evolve, blogs are a great way to stay up to speed with AWS and the world of cloud computing. Of course, in addition to aws labs, a free-trial, extensive documentation, and their own YouTube channel, AWS also has their own blog. Since AWS actually has a number of blogs that vary by region and technology, we recommend that you start by following Jeff Barr – Chief Evangelist at Amazon Web Services, and primary contributor. Edureka was mentioned in our recommended YouTube channels, they also have a blog that covers plenty of AWS topics. The CloudThat blog is an excellent resource for AWS and all things cloud, and was co-founded by Bhaves Goswami – a former member of the AWS product development team. Additionally, AWS Insider is a great source for all things AWS. Here you’ll find blogs, webcasts, how-to, tips, tricks, news articles and even more hands-on guidance for working with AWS. If you prefer newsletters straight to your inbox, check out Last Week in AWS and Inside Cloud

6. Online Learning Platforms

As public cloud computing continues to grow – and AWS continues to dominate the market – people have become increasingly interested in this CSP and what it has to offer. In the last 8-10 years, two massive learning platforms were developed, Coursera and Udemy. These platforms offer online AWS courses, specializations, training, and degrees. The abundance of courses that these platforms provide can help you learn all things AWS and give you a wide array of resources to help you train for different AWS certifications and degrees. 

7. GitHub

GitHub is a developer platform where users work together to review and host code, build software and manage projects. This platform has access to a number of materials that can help further your AWS training. In fact, here’s a great list of AWS training resources that can help you prepare for an Amazon Cloud certification. The great thing about this site is the collaboration among the users. The large number of people in this community brings together people from all different backgrounds so they are able to provide knowledge about their own specialties and experiences. With access to everything from ebooks, video courses, free lectures, and sample tests, posts like these can help you get on the right certification track. 


There’s plenty of information out there when it comes to AWS training resources. We picked our 7 favorite resources for their reliability, quality, and range of information. Whether you’re new to AWS or consider yourself an expert, these resources are sure to help you find what you’re looking for.

AWS Compute Optimizer Review: Not Quite Rightsized for Rightsizing

AWS Compute Optimizer Review: Not Quite Rightsized for Rightsizing

In December, AWS announced a new service called AWS Compute Optimizer that provides recommendations with the goal of properly sizing EC2 virtual machines. Rightsizing is one of AWS’s listed five pillars of cost optimization, and it’s good to see AWS following the trend of cloud providers making it easier for customers to optimize for cost and performance. Actually, this is not the first “rightsizing tool” they’ve promoted. Early last year they pushed what was essentially a collection of Python scripts in the AWS Solutions Portal called “AWS Right Sizing”. 

As cloud cost optimizers here at ParkMyCloud, rightsizing is high on the list of optimization strategies we focus on. The ParkMyCloud platform offers rightsizing recommendations and actions, along with two other cost optimization pillars: “Increase Elasticity” through scheduled shutdown of idle resources, and “Measure, monitor, and improve” through cost and savings reports and an RBAC-enabled user portal. Let’s take a look at what the AWS Compute Optimizer offers, and how it compares to ParkMyCloud’s rightsizing.

AWS Compute Optimizer Overview

The AWS Compute Optimizer service generates size change recommendations based on your existing EC2 servers, including those that are in Auto Scaling groups. Each EC2 virtual machine can get up to 3 recommendations for different families and sizes that you could choose, along with the performance risk and costs associated with each option. While you are browsing the options, the interface will show you what the performance would have looked like over the past 2 weeks if you were running on the selected instance size instead of the current instance size, which is nice for analyzing the options against your organization’s risk profile. However, there is no direct way to take the Rightsizing action, so you must go and adjust the instance settings manually.

AWS Compute Optimizer is free of charge and available on all AWS accounts regardless of support level. You do have to choose to opt-in to use the service before recommendations will be made. A major limiting factor is the region availability: as of February 4, 2020, AWS Compute Optimizer is available in 16 regions, and supports the M, C, R, T and X instance families. It uses only the past 2 weeks’ worth of Cloudwatch data to generate recommendations, which is a small window that may result in odd recommendations if those two weeks include any anomalies. 

If your EC2 instances line up with this subset of instance types and regions, then the AWS Compute Optimizer can provide some suggestions for cost savings. However, if your needs are a little more diverse or robust, read on.

ParkMyCloud Rightsizing Overview

ParkMyCloud has offered scheduling of idle cloud resources since 2015. Last year we announced a major advancement in the platform’s cost optimization capabilities with the release of Rightsizing. 

Similarly to the AWS Compute Optimizer, ParkMyCloud’s Rightsizing capabilities offer up to 3 recommendations for different sizes that your instances could be based on Cloudwatch data. Additionally, ParkMyCloud’s Rightsizing can:

  • ParkMyCloud is multi-cloud, multi-account, and multi-region in a single pane of glass, so you can view recommendations across all of your cloud accounts in one place (including all AWS regions, not just the ones listed above and Azure and Google Clouds)
  • ParkMyCloud can take the Rightsizing action for you once you accept a recommendation, including scheduling that resize action for a future time (such as during a maintenance window).
  • ParkMyCloud’s recommendations are based on data from a period of up to 24 weeks, providing a much more robust recommendation compared to the 2-week data set imposed by Cloudwatch. 
  • ParkMyCloud makes recommendations for and resizes RDS databases, including Aurora instances. RDS databases have an average cost of 75% higher than EC2 instances, which means this is a significant opportunity for cost savings.
  • All AWS instance sizes are supported, not just M/C/R/T/X
  • Users can reject a recommendation and give an explanation, so administrators know why actions weren’t taken.
  • Savings from Rightsizing (and parking) are tracked and reported in ParkMyCloud, so you can show management or the CFO just how much money you’re saving the company.

To summarize:

Optimize Your Rightsizing 

The AWS Compute Optimizer is a great feature that AWS is offering for free to its cloud users, but the limitations and inability to take direct action from the recommendations makes it less useful for serious cost optimization. ParkMyCloud’s features make it the right choice for saving money on your cloud bill while optimizing performance, and the free trial makes it easy to get started today. Feel free to contact us if you have any questions.

Cloud Economics: How to Overcome Human Biases to Save Money

Cloud Economics: How to Overcome Human Biases to Save Money

It’s important for cloud customers to understand cloud economics. Cloud costs are dynamic – and hopefully, optimized. However, that’s not always the case. Since optimizing cloud infrastructure is a “technological problem”, there are a number of human biases at play that are not always accounted for. 

What is Cloud Economics? 

Some articles you’ll find jump directly to the idea that “cloud economics” is a synonym for “saving money”. And while the economies of scale and infrastructure on demand mean that public cloud can save you money over traditional infrastructure, the two terms are not interchangeable.

Shmuel Kliger (founder of our parent company, Turbonomic) explains in this video that cloud economics “is the ability to deliver IT in a scalable way with speed, agility, new consumption models, and most importantly, with a high level of elasticity.”

 

He further explains this idea in another video –  that it’s microservices architecture taking the place of monolithic applications that allows this elasticity and rewrites the way cloud economics works.

Rational vs. Behavioral Economics in the Cloud

The concepts described above are exciting – but before assuming these benefits of speed, agility, etc. will be gained naturally upon adopting any type of cloud technology, we need to remember the human context. Taken from the perspective of rational economics, cloud users should always choose the most optimized cloud infrastructure options. If you’ve ever seen a whiteboard diagram of the cloud infrastructure your company uses, or taken a peek at your organization’s cloud bill, you’ll know this is not the case. 

To understand why, it’s beneficial to take a behavioral economics perspective. Through this lens, we can see that individuals and businesses are often not behaving in their own best interests, for a variety of reasons that will vary by the individual and the organization… and perhaps by the day. 

Economics of Cloud Costs

Cost is particularly dependent on where you sit within an organization and the particular lens you look through. For example, the CFO might have a very different view from the engineering team. Here’s a great talk and Twitter thread on the cultural issues at play from cloud economist Corey Quinn.

Examples of cognitive biases impacting cloud cost decision making include:

    • Blind spots – there are always going to be higher priorities than costs – including but not limited to speed of development and performance. Additionally, many engineering and development teams don’t believe it’s their job to care about costs. Or at least, engineering departments are seen less as cost centers and more as profit centers by generating value. Cost optimization is tacked on at the end of a project and doesn’t receive much attention until it spirals out of control. 
    • Choice Overload – the major cloud providers now offer an enormous number of services – AWS had 190 at our last count – more than any one person can easily evaluate to determine if they’re using the best option. Similarly, most users have a poor understanding of the total cost of ownership of their cloud environment and don’t actually know what cloud infrastructure exists. 
    • The IKEA Effect – people place a disproportionately high value on products they partially created. Developers may hang on to unoptimized infrastructure, because they created it, and it would hurt to let it go, even if it’s unnecessary to keep. 

(There are plenty more, but perhaps we’re falling prey to the bias and some of these decisions are perfectly rational.)

The point is that despite the automated buzz of AI and robotic process automation, the cloud doesn’t inherently manage itself to optimize costs. You need to do that. 

Cloud providers’ management environments are confusing, and do not always encourage users to make good decisions. Luckily, the wind has started to blow the other way on this front, as cloud providers realize that providing cost optimization options provides a better user experience and keeps them more customers in the long run. We’ve started to see more options like Google’s Sustained Use discounts and AWS’s new Savings Plans that make it easier to reduce costs without impacting operations. However, it’s up to the customer to find, master, and implement these solutions – and to know when cloud native tools don’t do enough. 

How to Set Yourself Up for Success & Start Saving 

The good news is that being aware of natural tendencies that impact cost optimization is the first step to reducing costs. 

Determine Your Priorities 

First, determine what your goals are. What does “cost saving” mean to you? Does it mean reducing the overall bill by 20%? Does it mean being able to allocate every instance in your AWS account to a team or project so you can budget appropriately? Does it mean eliminating unused infrastructure?

Understand Your Bill

No matter what your goal, you need to understand your cloud bill before you can take action to reduce costs. The best way to do this is with a thorough tagging strategy. All resources need to be tagged. Ideally, you will create a set of tags that is applied to every resource, such as team, environment, application, and expiration date. To enforce this, some organizations have policies to terminate non-compliant instances, effectively forcing users to add these essential tags.  

Then, you can start to slice and dice by tag to understand what your resources are being used for, and where your money is going. 

Review Cost Saving Options 

Once you have a better picture of the resources in your cloud environment, you can start to review opportunities to use pricing options such as Reserved Instances or Savings Plans; places to eliminate unneeded resources such as orphaned volumes and snapshots; schedule non-production resources to turn off outside of working hours; upgrade and resize instances; etc.

Designate a Cost-Responsible Party

While engineering teams can do these reviews as part of their normal processes, many organizations choose to create a “cloud center of excellence” or a similar department, solely focused on cloud expertise and cost management. Sysco shared a great example of how this worked for them, with gamification and a healthy dose of bagels as motivating factors for users throughout the organization to get on board with the team’s mission.

Automate Where You Can

On the flip side, there’s only so far food bribery can go. Since, as we’ve outlined in our cloud economics model, changing user behavior and habits is difficult, the best way to ensure change is by sidestepping the human element altogether. Those on/off schedules for dev and test environments? Automate them. Governance? Automate it. Resizing? Automate.

AWS vs Alibaba Cloud Pricing: A Comparison of Compute Options

AWS vs Alibaba Cloud Pricing: A Comparison of Compute Options

As cloud users continue to use Alibaba Cloud, extending its global presence, we’ll review a comparison of AWS vs Alibaba Cloud pricing. Commonly recognized as the #4 cloud provider (from a revenue perspective anyway), Alibaba is one of the fastest-growing companies in the space today. 

Alibaba has been getting a lot of attention lately, given its rapid growth, and making headlines after the release of their latest quarterly revenue and full fiscal year 2019 reports. Alibaba is at the top of the market in Asia, and dominating in China with cloud revenue up 66% year-over-year. While Alibaba is in the top 5 CSPs worldwide, they still have a lot of plans for the future to maintain this growth and continue to move up. 

The company said it is focused on high-value security, analytics, and artificial intelligence tools and “rationalizing our offerings of commodity products and services.” With an annual revenue run rate of $4.5 billion, it is clear that Alibaba Cloud intends to compete globally with AWS and other major cloud providers. 

However, on a global scale, AWS continues to dominate the market. In the latest quarter, Amazon reported Amazon Web Services (AWS) sales of $7.7 billion, compared to $5.44 billion at this time last year. AWS revenue grew 41% in the first quarter – at this time last year, that number was 49%.

ParkMyCloud supports Alibaba Cloud and AWS, and with that, let us focus on pricing and cost savings – our forte. In this blog, we dive a bit into the pricing of Alibaba Elastic Compute Service (ECS), compare it with that of the AWS EC2 service and whether Alibaba Cloud computing can offer better value than AWS.

Alibaba ECS vs AWS EC2

Elastic Compute Service (ECS) and Elastic Cloud Compute (EC2), respectively, are the standard compute services offered by Alibaba Cloud and AWS.

Both cloud computing services provide the same core features:

  • The ability to choose from dozens of instance types.
  • Support for virtual as well as bare-metal servers.
  • Compatibility with a variety of Windows and Linux-based operating systems.
  • The ability to create custom images.

The major differences between Alibaba Cloud ECS and AWS EC2 are that Alibaba Cloud provides a wider range of instance families and that AWS offers more regions globally.

Alibaba vs Aliyun

Finding actual pricing for comparison purposes can be a bit complicated, as the prices are listed in a couple of different places and do not quite exactly match up since pricing varies between different instance types, and no instances from the two companies are identical. If one searches for Alibaba pricing, one ends up here, which I am going to call the “Alibaba Cloud” site. However, when you actually get an account and want to purchase an instance, you can up here or here, both of which I will call the “Aliyun” site. [Note that you may not be able to see the Aliyun sites without signing up for an account and actually logging-in.]  

Aliyun (literally translated “Ali Cloud”) was the original name of the company, and the name was changed to Alibaba Cloud in July 2017. Unsurprisingly, the Aliyun name has stuck around on the actual operational guts of the company, reflecting that it is probably hard-coded all over the place, both internally and externally with customers. (Supernor’s 3rd Conjecture: Engineering can never keep up with Marketing.)

Both sites show that like the other major cloud providers, Alibaba’s pricing model includes a Pay-As-You-Go (PAYG) offering, with per-second billing. Note, however, that in order to save money on stopped instances, one must specifically enable a “No fees for stopped instances” feature. Luckily, this is a global one-time setting for instances operating under all Pay-As-You-Go VPC instances, and you can set it and forget it. Unlike AWS, this feature is not available for any instances with local disks (this and other aspects of the description lead me to believe that Alibaba instances tend to be “sticky” to the underlying hardware instance). On AWS, local disks are described as ephemeral and are simply deallocated when they are not in use. Like AWS, Alibaba Cloud system/data disks continue to accrue costs even when an instance is stopped.

Both sites also show that Alibaba also has a one-month prepaid Subscription model. Based on a review of the pricing listed for the us-east-1 region on the Alibaba Cloud site, the monthly subscription discount reflects a substantial 30-60% discount compared to the cost of a PAYG instance that is left up for a full month. For a non-production environment that may only need to be up during normal business hours (say, 9 hours per day, weekdays only), one can easily see that it may be more cost-effective to go with the PAYG pricing, and use the ParkMyCloud service to shut the instances down during off-hours, saving 73%.

But this is where the similarities between the sites end. For actual pricing, instance availability, and even the actual instance types, one really needs to dive into a live Alibaba account. In particular, if PAYG is your preference, note that the Alibaba public site appears to have PAYG pricing listed for all of their available instance types, which is not consistent with what I found in the actual purchasing console.

Low-End Instance Types – “Entry Level” and “Basic”

The Alibaba Cloud site breaks down the instance types into “Entry Level” and “Enterprise”, listing numerous instance types under both categories. All of the Entry Level instance types are described as “Shared Performance”, which appears to mean the underlying hardware resources are shared amongst multiple instances in a potentially unpredictable way, or as described by Alibaba: “Their computing performance may be unstable, but the cost is relatively low” – an entertaining description to say the least. I did find these instance types on the internal purchasing site, but did not delve any further with them, as they do not offer a point of reference for our AWS vs. Alibaba Cloud pricing comparison. They may be an interesting path for additional investigation for non-production instance types where unstable computing performance may be OK in exchange for a lower price.

That said…after logging in to the Alibaba management console, reaching the Aliyun side of the website, there is no mention of Entry Level vs Enterprise. Instead, we see the top-level options of “Basic Purchase” vs “Advanced Purchase”. Under Basic Purchase, there are four “t5” instance types. The t5 types appear to directly correspond to the first four AWS t2 instance types, in terms of building up CPU credits.

These four instance types do not appear to support the PAYG pricing model. Pricing is only offered on a monthly subscription basis. A 1-year purchase plan is also offered, but the math shows this is just the monthly price x12. It is important to note that the Aliyun site itself has issues, as it lists the t5 instance types in all of the Alibaba regions, but I was unable to purchase any of them in the us-east-1 region – “The configuration for the instance you are creating is currently not supported in this zone.”  (A purchase in us-west-1, slightly more expensive, was fine).

The following shows a price comparison for Alibaba vs AWS for “t” instance prices in a number of regions. The AWS prices reflect the hourly PAYG pricing, multiplied by an average 730 hour month. I was not able to get pricing for any AWS China region, so the Alibaba pricing is provided for reference.

While the AWS prices are higher, the AWS instances are PAYG, and thus could be stopped when not being used, common for t2 instances used in a dev-test environment, and potentially saving over 73%. One can easily see that this kind of savings is needed to compete with the comparatively low Alibaba prices. I do have to wonder what is up with that Windows pricing in China….does Microsoft know about this??

Aliyun “Advanced Purchase”

Looking at the “Advanced” side of the Aliyun purchasing site, we get a lot more options, including Pay-As-You-Go instances. To keep the comparison simple, I am going to limit the scope here to a couple of instance types, trying to compare a couple m5 and i3 instances with their Alibaba equivalents. I will list PAYG pricing where offered.

In this table, the listed monthly AWS prices reflect the hourly pay-as-you-go price, multiplied by an average 730 hour month.

The italicized/grey numbers under Alibaba indicate PAYG numbers that had to be pulled from the public-facing website, as the instance type was not available for PAYG purchase on the internal site. From a review of the various options on the internal Aliyun site, it appears the PAYG option is not actually offered for very many standalone instance types on Alibaba…

The main reason I pulled in the PAYG prices from the second source was for auto scaling, which is normally charged at PAYG prices. In Alibaba, “all ECS instances that Auto Scaling automatically creates, or manually adds to a scaling group will be charged according to their instance types. Note that you will still be charged for Pay-As-You-Go instances even after you stop them.”  It is possible, however, to manually add subscription-based instances to an auto scaling group, and configure them to be not removed when the group scales-down.

In general, the full price of the AWS Linux instances over a month is 22-35% higher than of an Alibaba 1-month subscription. A full price AWS Windows instance over a month is 9-25%  higher than that of an Alibaba subscription. (And once again, it appears Windows licensing fees are not a factor in China.)

When it comes to Alibaba Cloud pricing vs AWS, Alibaba Cloud is trying to attract business and expand their global footprint by offering special promotions typically consisting of free trials, specially priced starter packages, and time-limited discounts on premium services. In many cases, taking advantage of these promotions could be useful in order to save money, but so is AWS.

AWS Introduces Savings Plans for EC2

Amazon also has their fair share of money-saving offerings as well. AWS announced the release of AWS Savings Plans – a new system for getting a discount on committed usage for EC2.

There are two kinds of Savings Plan: 

  • Compute Savings Plan – Apply to EC2 usage regardless of instance family, size, AZ, region, OS, or tenancy.  For any given instance configuration, pricing is similar (if not identical) to an equivalent Convertible RI, giving up to a 66% discount.
  • EC2 Instance Savings Plan – Specific to EC2 instances within a family in a specific region, but regardless of size, OS, or tenancy.  For any given instance configuration, pricing is similar to an equivalent Standard RI, giving up to a 72% discount in exchange for the reduced flexibility.

AWS Reserved Instance new queuing option

You can now purchase reserved instances that, rather than going into effect immediately, are scheduled for future purchase.

Now, when planned correctly, you can avoid lapsing on Reserved Instance coverage for your workloads by scheduling a new reservation purchase to go into effect as soon as the previous one expires. The furthest in advance you can schedule a purchase is three years, which is also the longest RI term available. 

However, AWS RI purchases have few limitations, they can be queued for regional Reserved Instances, but not zonal Reserved Instances. Regional RIs are the broader option as they cover any availability zone in a region, while zonal RIs are for a specific availability zone and actually reserve capacity as well.

AWS vs Alibaba Cloud Pricing: Alibaba is cheaper, but…

Alibaba definitely comes out as less expensive in this AWS vs Alibaba cloud pricing comparison – the one-month subscription has a definite impact. However, for longer-lived instances, AWS Reserved Instances will certainly be less expensive, running about 40-75% less expensive than AWS PAYG, and thus less than some if not all of the Alibaba monthly subscriptions. AWS RI’s are also more easily applicable to auto scaling groups than a monthly subscription instance.

For non-production instances that can be shut down when not in use, PAYG is less expensive for both cloud providers, where ParkMyCloud can help you schedule the downtime. The difficulty with Alibaba will actually be finding instances types that can actually be purchased with the PAYG option.

Tips for Better Cloud Expense Management

Tips for Better Cloud Expense Management

The term “cloud expense management” has been co-opted by many parties, from those selling employee expense management software hosted in the cloud, to telecom expense management software (TEM), to IT expense management software, to cloud cost management software which focuses on SaaS, IaaS, and/or PaaS services. For the purpose of today’s blog we will slant towards cloud management software and specifically key in on infrastructure, IaaS and PaaS offered as public cloud services.

One of the greatest benefits of cloud computing is supposed to be cost efficiency, but there is a flip side to the agility gained by using public cloud computing. Costs can easily get out of control if your cloud services are not effectively provisioned or properly governed and managed. Most organizations have not yet fully migrated all their applications to the cloud. Because of this hybrid cloud structure, public cloud services can become an added cost to their overall budget, making understanding, planning and managing these cloud services extremely important. That is where cloud expense management software comes into play, it really needs to be part of your overall cloud management strategy from day one.

Cloud Computing Services

Before we discuss further how to manage cloud expenses, let’s take a look at the different cloud service types in more detail to get a picture of the expenses there are to manage. Remember there are literally hundreds of IaaS and PaaS services offered in the public cloud — as of this blog writing AWS alone has 190+ cloud services.

Infrastructure-as-a-service (IaaS) is a category that offers traditional IT services like compute, database, storage, network, load balancers, firewalls, etc. on demand and off premise – vendors like AWS, Azure and Google dominate this market.

Platform-as-a-service (PaaS) is a category of cloud computing services that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app – AWS, Azure and Google offer PaaS along with IBM, Oracle, and RedHat to name a few.

Software-as-a-service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as “on-demand software” – vendors who dominate this space include Salesforce, ServiceNow, Microsoft and SAP (and ParkMyCloud) to name a few.

Enterprise expenses in these categories are skyrocketing as outlined in our cloud waste blog, along with the difficulties of administering an effective cloud expense management for a single cloud, let alone a multi-cloud or hybrid cloud environment in order to protect a company’s bottom line. Companies now require visibility and insights into their cloud-based services, and automated controls and actions to remediate and manage those cloud service expenses.

Where does Cloud Expense Management fit?

As mentioned, cloud expense management should be a key element in your overall cloud management strategy. Enterprises need a clear strategy here and generally tools fit into the following categories — please note functionality can be both natively provided by the cloud service provider or via a third-party:

  • Provisioning and orchestration: create, modify, and delete resources as well as orchestrate workflows and management of workloads
  • Automation: Enable cloud consumption and deployment of app services via infrastructure-as-code and other DevOps concepts
  • Security and compliance: manage role-based access of cloud services and enforce security configurations
  • Service request: collect and fulfill requests from users to access and deploy cloud resources
  • Monitoring and logging: collect performance and availability metrics as well as automate incident management and log aggregation
  • Inventory and classification: discover and maintain pre-existing brownfield cloud resources plus monitor and manage changes
  • Cost management and optimization: track and rightsize cloud spend and align capacity and performance to actual demand
  • Migration, backup, and DR: enable data protection, disaster recovery, and data mobility via snapshots and/or data replication

We believe cloud expense management is a subcategory of Cloud Cost Management and Optimization. Tools in this category generally help enterprises with:

  • Cost visibility, reporting, budgeting and chargeback
  • Buy and manage Reserved Instances (RI’s) and Savings Plans
  • Leverage usage data in real-time to make recommendations and take actions on idle, under or overprovisioned, or orphaned cloud resources
  • Create an action plan to optimize future cloud costs and avoid budget surprises

Why is Cloud Expense Management Important?

Simply put, the cloud is a utility and it needs to be managed as such – cloud costs need to be reported and allocated, cloud services need to be optimized, and in order to reap the benefits of cloud these cost control actions needed to be automated.  Whether cloud expense management is your full-time, or “when-you-have-time” responsibility, it is important to build it into your cloud management strategy from day one. It will take time but what you get in return is increased optimization and validation of your cloud services and costs, ensuring you maximize your ROI.