With the difficult year we had in 2020, reducing costs throughout the organization is on everyone’s minds. Reducing costs in the IT realm can be challenging, as most of the spending is for software and hardware deemed essential and necessary. One area of IT that promised savings is migrating workloads to the cloud. This savings is supposed to be realized after the migration, but the costs seem to increase steadily, from month to month with no end in sight.
The challenge most IT organizations face is determining the reason for the increase. Cloud providers such as AWS have many options when it comes to saving money in the cloud. AWS in particular has over 1.5 Million different SKU’s to choose from, which makes it very difficult and confusing to decide what is best for an organization. There is also a lack of billing information, a single month’s invoice could have over a million different line items all summed up into a two-page invoice. There is just not enough information provided by the cloud providers to know what an organization is paying for.
Another challenge most companies face is the lack of expertise and bandwidth to tackle cloud cost optimization or reduction strategy. Sure, there are many options when it comes to software that can shine some light on the spending, but going out and actually modifying the resources being used requires knowledge and time. There is also a human nature aspect and the mindset that if it’s not broken, don’t fix it.
Lastly, there is no silver bullet that can fix everything. A truly optimized solution requires many small changes that require an extraordinary amount of time, knowledge, and tools.
The basic formula for calculating saving is taking the quantity multiplying by the price per unit and then subtracting any discounts that are reached through negotiation, achieving a certain spend or longer-term contracts. The reality is that most companies focus on getting the best discount, but lack the resources and knowledge to reduce the actual quantity of units or the price paid per unit for selecting the correct size units. This leaves a lot of savings opportunities.
So what is the best way to optimize cloud spending in 2021?
Consider the main options available today:
- Cloud provider native tools
- 3rd party software
- A managed service provider
Each of these have their pluses and minuses. The cloud provider native tools are typically included at no additional charge, but they often lack functionality and do not provide a lot of details of how to optimize the cloud environment. 3rd party software provides details and some strategies for optimizing, but they still require a trained user to perform actions to achieve the savings. A managed service provider typically has the knowledge, tools, and time to optimize the environment, but there is a fee involved in using one that may not pay for itself.
In our next blog, we will discuss some of the main strategies for optimizing cloud environments.
Part 2 – Optimize IT Spend – Strategies to Reduce Cloud Bill
With the difficult year we had in 2020, reducing costs throughout the organization is on everyone’s minds. Reducing costs in the cloud is challenging and requires knowledge, focus and time. In this blog, we will discuss some of the top strategies used by experts to not only reduce spending but to also optimize cloud environments for best performance.
- The easiest way to optimize cloud costs is to look for stopped or unattached resources. Often an administrator or developer might create a temporary server to perform a function and forget to turn it off when the job is done. Another possibility is when an administrator forgets to remove storage attached to instances they terminate. The result is that an organization’s cloud invoices will include charges for resources they once purchased but are no longer using. A cloud cost optimization strategy should start by identifying unused and completely unattached resources and removing them.
- The next step in optimizing cloud computing costs is to address idle resources. An idle computing instance might have a CPU utilization level of 1-10%. An organization is still invoiced for 100% of that computing instance, which creates a significant waste. A key cloud cost optimization strategy is to identify these instances and eliminate or consolidate them into fewer instances. The cloud offers autoscaling, load balancing, and on-demand capabilities that allow a user to scale up computing power at any time.
- Upgrading to current platform can create significant savings opportunities, as cloud providers raise rates on older platforms. The theory of “If it’s not broke, don’t fix it” does not apply to cloud environments, because cloud providers are constantly upgrading to the latest platforms which save them costs. They pass these costs to organizations, but only if the organization takes advantage by upgrading. Upgrading to the current platforms is a lengthy process and should only be done by experienced engineers, but the savings achieved can be exponential.
- Majority of resources that are initially migrated to the cloud are oversized. It is very difficult to size resources correctly when there are more than a million different combinations to choose from. The best way to select the correct compute sizes is to monitor the actual resource usage after deployment. Simulate performance against other resource types and identify the optimum sizes. While this is a tedious process, the savings are significant and will help with achieving peak performance from the resources that are being used.
- Another great way to reduce spend and optimize resources is to create schedules for all the resources being used. Vast majority of non-production resources are minimally utilized outside of normal business hours; however, most are still operating on a 24×7 schedule at a static size. Overpaying for resources that nobody is using creates a significant waste. Scheduling resources to match usage patterns creates significant savings opportunities.
Many more strategies to reduce cloud bills and optimize cloud environments exist; rightsizing compute clusters, reducing provisioned storage, managing storage lifecycle policies are just a few of them. Negotiating best discounts based on spend commitments is also very important. All these strategies require knowledge and specialized tools that are not available from cloud providers. In our next blog, we will discuss the best solution to optimizing cloud environments and reducing costs – hiring a professional service provider.
Part 3 – Optimize IT Spend – Reduce Cloud Bill
With the difficult year we had in 2020, reducing costs throughout the organization is on everyone’s minds. Reducing costs in the cloud is challenging and requires knowledge, focus and time. In this blog, we will introduce CloudSaver and discuss how CloudSaver can reduce cloud bills by 50%.
CloudSaver is a managed service provider that has developed proprietary tools designed specifically to identify overspending in the cloud and reduce it significantly. The CloudSaver team, comprised of engineers, CPA’s and cloud analysts focus on cost optimization, that’s all they do.
They start with monitoring and collecting billing data. Then analyze and identify opportunities to save money, create a customized optimization plan and review all the finding and opportunities with customers. Finally, they go out and execute on the savings after receiving approval by the customers. Overall, it’s a highly collaborative process and the customer is always in control of all decisions. The customers benefit in many ways but primarily, they save money while spending very little time working on the project, the CloudSaver team does all the work.
The results have been impressive, some recent examples include:
Saved an educational institution over $2M on $3.4M spending, by creating schedules for all resources, rightsizing compute resources, reducing storage volumes, eliminating dormant resources, updating lifecycle policies, managing object storage, and crafting savings plans, spot instances and reserved instances discounts. The savings were realized in less than six months and created a 502% ROI.
Saved a Fortune 100 Biotech company over $3M on $5.5M in spending, by analyzing over 1.7M invoice line items and 661M data points over one month’s invoice. Created an optimization plan that included 4251 specific actions that would reduce their bill by more than 55%. The specific actions included rightsizing compute instances, migrating from older platforms, eliminating unused resources, reducing storage volumes, creating advanced scheduling, platform optimization and crafting savings plan strategies. The savings will be realized in the first six months, with a 500% first year ROI.
While the cash savings created are immediate and companies start to see results in the first 30 days of working with CloudSaver, the bigger savings come from having to use minimal resources to achieve the savings. CloudSaver does all the work, making the implementation process very simple. One customer was able to save over 3000-man hours of work by letting CloudSaver perform all platform migrations.
Reducing a company’s IT spending in 2021 is no easy task. Let the experts at CloudSaver do the heavy lifting, become an extension of your company’s IT team, and optimize cloud resources, where significant savings can be achieved.
Climb proudly partners with Cloudsaver to deliver partners better ways to optimize their cloud expenditure and reduce it. To learn more contact your Climb rep today!