Moving to the cloud opens a world of possibilities for your business – don’t let a huge bill be one of them.
These days, it’s almost impossible to find an organization that’s had zero exposure to the cloud. From email to productivity to collaboration tools, cloud has become a kind of omnipresent resource that touches some part of our lives, whether at work or at home. The business benefits of cloud computing have always been clear: move your workloads off-prem and reap the rewards of a consumption-based model, paying only for what you use, along with the agility and massive scalability that you can only get from the cloud.
But receiving a bill that reads much higher than you expected is a more common occurrence than you might think.
In an on-prem setup, infrastructure like compute and disks are procured at regular lifecycle intervals – every four or five years. This capital expense, representing a large, fixed pool of consumable IT resources, becomes a sunk cost of sorts as the infrastructure is consumed by provisioned servers and services usually via virtualization solutions like VMware vSphere or Microsoft Hyper-V. In this scenario, overprovisioning of server workloads is less important because the underlying resource costs have already been incurred and are typically not attributed to each element that draws down from the pool. The only time additional costs are incurred is if the pool of resources needs to be expanded.
On the flipside, cloud consumption costs are immediate and accounted for as operational expenses. Instead of building an infrastructure that can hold up for the next five years, you lease resources that you need right now, and expand or contract as you go. By-the-minute billing meters start from the moment resources are provisioned in Azure for things such as compute, licensing, storage, and pretty much any other service you can think of. Cloud costs are derived much the same way as utilities, like electricity for example. Leave a bunch of lights on in your house and your bill is bound to go up. Turn them off or switch to LEDs, and you will reduce your bill. Essentially, the same principles apply to cloud optimization – except with cloud you sometimes can’t tell which lights are on because they are in areas you can’t see.
This leads to cloud costs that increase beyond initial estimates very quickly, and without obvious explanation. With easy access to near unlimited resources comes the potential for near unlimited spending. Silicon Valley startup Milkie Way burning $72,000 in a few hours while testing code on Google’s Firebase and Cloud Run – and almost going bankrupt – is a case in point. Poor cloud management is a problem that plagues organizations of all sizes and will continue to do so for years to come. Gartner estimates that 80% of companies unaware of their cloud optimization issues will overspend by 20 to 50%.
Customers come to us with thoughts and questions along that same line. “Cloud costs feel out of control” or “How can we save money on Azure?” or “The cloud is costing way too much – get me out.” Performing analyses on cloud spend is not a simple exercise and is actually quite cumbersome to perform with the regularity necessary to uncover issues before they arise, especially if cloud is not the only thing you have to worry about.
In the resource manager portal, the Azure Advisor recommendations and visualizations have been evolving and improving. Compugen’s Azure team generally feels that this view, while useful, still is not comprehensive enough for full cost optimization. A thorough analysis, conducted by a third party is something we highly recommend to get a clear sense of your environment and any optimization possibilities.
Driven from a desire to help our customers realize the true potential of the cloud, we first looked for those tools…and when we couldn’t find them, we built them ourselves. Compugen’s Azure team has a vision of developing new technologies that help our customers reach their goals. We are the designers, the out-of-the-box thinkers, and the coders. With this goal at heart, our Azure team has developed a comprehensive and granular approach to cloud cost management which has provided our customers with an average 20% cost savings per month. The service is built on automated applications that leverage artificial intelligence and analytics to ensure that no component is left unexamined in the entire cloud architecture. This information is then synthesized with expert analysis from our senior cloud architects into recommendations delivered to the customer.
So far, we’re very proud of the results. One of our biggest Managed Azure Services customers came to us with steadily increasing Azure consumption costs, looking for ways to optimize, and ideally lower, their monthly cloud spend. An assessment generated recommendations that would allow them to cut their monthly Azure cloud spend by a third. Through the annualized savings realized, the customer was able to consider kicking off additional cloud-related projects much sooner than expected.
We’re learning with every assessment we do, and we kick off each Azure Cost Optimization service with a complimentary assessment. It allows us to uncover clear findings as well as estimates on possible savings that we can share with our customers. At that point, our customers can work through the options on their own, or they can engage with Compugen’s Azure team to assist in a formal cost optimization exercise to help them realize the cost savings outlined in the assessment report.