The Quarterly Cloud Cost Tune-Up
In this blog, we will focus on how you can make your life a little easier by getting help on the six crucial elements for the quarterly cloud cost tune-up by implementing a) tools, getting outside help from b) service providers or c) consultants.
Using technology is a must for tuning a cloud spend. Most of our customers generate millions and millions of rows of usage data. Far more than can be managed in a spreadsheet. Some organizations are implementing tools like Apptio Cloudability or Densify. Others rely on Azure Cost Optimizer, or AWS Trusted Advisor, both included in your cloud subscription. Tools are crucial – we’ve made one of our own that we use to calculate savings for our customers.
What tools give us is an overview of things you COULD tune, and you will then need to sort through this to find the ones that make the most sense, have the biggest impact in the shortest amount of time, and that is consistent with your future strategy and limitations.
The real challenge in getting savings done is not the tool; it is mainly time and priorities. There is massive pressure on the teams to deliver with the highest possible speed, which in turn means that the cost optimization moves down the priority list – at least until the cost is becoming a significant issue. Then a lot of money has already been wasted.
Hence, rather than asking yourself “what tool should I use”, the most important question for you to answer is, “should I put a team in place that has the time and priority to drive down our cloud costs?”
When should I implement a tool?
A tool is not a solution to getting savings done. It requires a team with sufficient time, and with savings as their top priority. Hence, implement a tool if you have a dedicated team in place.
Cloud partners / Cloud Service Providers
Some service providers in the cloud space include some form of cost optimization in the price. This is a convenient solution. They know your environment; they know the services and prices with your cloud provider, and they have the necessary access to implement any changes directly.
The feedback we get, however, is is that operationally this approach is not working as well as it could in terms of cost management. Unfortunately, the data we have confirm it – there are nearly always double-digit percentages in savings to be made.
Exactly why it does not deliver the best savings is unclear, but there might be a couple of reasons:
- The partner is focused on the migration/operations/development of solutions more than cost-optimization if nothing else then because this is where you as a customer focus.
- Like it or not, there is often a conflict-of-interest. Service providers get a commission based on the money you pay for cloud services. If they also operate your environment, their operational mark-up may also be dependent on your spending. Hence, saving you money will take time for your partner and reduce their revenue significantly.
How do I best handle the conflict-of-interest?
The best way to handle conflict-of-interest is by either a) having an independent third party do a quarterly review, or b) unbundling the cost optimization from the service contract
You can use external consultants to assist you in your quarterly reviews. It isn’t easy to categorize different types of consultants, but you should at least consider the following when selecting external assistance:
- Do they have a tested methodology to get a picture of your environment with existing data without installing sniffers, agents, etc.?
- Have they already a database with up-to-date services and pricing from your cloud provider?
- Do they have a tool in place to optimize your infrastructure?
- Do they have the necessary technical expertise to recommend technically feasible optimizations?
- Is their methodology well enough tested to save you time, so you only need to spend a few hours every quarter?
These questions are critical because you want the consultants to spend their time on your specific issues – not paying for generic data gathering or the consultants learning about this space.
What is critical when selecting a consultant?
Make sure they are focused on cloud cost optimization, so you do not a) have to pay for “generic” efforts (gathering data, or building a tool), and b) get recommendations that are not technically feasible.
Years ago, when I was living in the Middle East, I discussed with a personal fitness trainer and friend, “What is the most effective form of training?”. He laughed and said:
You know, I love this question, because many think of this the wrong way. They are looking for me to say, “set a massive goal, complete an Ironman”. That’s not the way at all; the most effective form of training is the one you get done!
With the pressure to deliver with speed and agility, one of the main challenges is not to understand that there are significant savings to be made on your cloud bill – the challenge is getting it done.
In next week’s blog, we will discuss in more detail what it takes to get cloud savings done and who should be responsible for what. Until then, I will leave you with the question, “How do I get cloud cost savings done?”. And could I get it done in 3 hours every three months?
Did you like this blog post? please share with your friends.