Cloud Spend 101: What is it, and why does it matter?
Cloud spend is the amount of money an organization spends in AWS and across all cloud platforms. A common belief is that moving to the cloud will significantly decrease your total cost of ownership (TCO) quickly, easily, and almost by default. Unfortunately, reaping the infrastructure cost savings of AWS is not that simple, but it certainly is obtainable. To achieve a lower TCO while simultaneously boosting productivity and gaining operational resilience, business agility, and sustainability, you must strategize your migration and growth within AWS.
The most common mistake made when migrating from on-prem environments to the cloud is going “like-for-like.” Basically, creating a cookie-cutter image of what existed on-prem in the new cloud environment. Because they are two completely different types of infrastructure, organizations end up way over-provisioned using unnecessary and expensive On-Demand Instance pricing.
Ideally, you want a well-developed game plan before migration starts to avoid losing money in the cloud. With the advice and support of a trusted cloud partner, a comprehensive strategy takes your organization from design to implementation to optimization. That puts you in the best position to stay on top of costs during every step of migration and once you’re established in AWS. Cost savings realized in the cloud can be reinvested in innovation that expands business value and grows your bottom line.
The 6 pillars of cloud spend optimization.
While it’s best to have a comprehensive strategy before migrating to the cloud, cloud spend optimization is an ongoing necessity in any cloud environment. With hundreds of thousands of different options for cloud services today, choosing the right tools is overwhelming and leaves much room for missteps. At the same time, there are also a lot of opportunities available. Regardless of where you are in your cloud journey, the six pillars of cloud spend optimization provide a framework for targeted interventions.
#1: Reserved Instances (RIs)
RIs deliver meaningful savings on Amazon EC2 costs compared to On-demand Instance pricing. RIs aren’t physical instances but a billing discount for using On-Demand Instances in your account. Pricing is based on the instance type, region, tenancy, and platform; term commitment; payment cadence; and offering class.
#2: Auto-Parking
A significant benefit of the cloud is scalability, but the other side of that is individual control. Often, an organization’s team members forget or are not prompted or incentivized to terminate resources when they aren’t being used. Auto-Parking schedules and automates the spin-up/spin-down process depending on hours of use to prevent paying for idle resources. This is an especially helpful tool for development and test environments.
#3: Right-Sizing
Making sure you have exactly what you need and nothing you don’t requires an analysis of resource consumption, chargebacks, auto-parked resources, and available RIs. Using those insights, organizations can implement policies and guardrails to reduce overprovisioning by tagging resources for department-level chargebacks and properly monitoring CPU, memory, and I/O (input/output).
#4: Family Refresh
Instance types, VM series, and Instance Families all describe the methods cloud providers use to package instances depending on the hardware. When instance types are retired and replaced with new technology, cloud pricing changes based on compute memory and storage parameters – this process is referred to as “Family Refresh.” Organizations must closely monitor instances and expected costs to manage these price fluctuations and prevent redundancies.
#5: Waste
Inherent in optimization is waste reduction. You need the checks and balances we’ve discussed to prevent unnecessary costs and reap the financial benefits of a cloud environment. Identifying waste and stopping the leaks takes time and regular, accurate reporting within each business unit. For example, when developers are testing, make sure they’re only spinning up new environments for a specific purpose. Once those environments are no longer used, they should be decamped to avoid waste.
#6: Storage
Storage catalyzes many organizations to move to the cloud because it’s a valuable way to reduce on-prem hardware spend. Again, to realize those savings, businesses must keep a watchful eye on what is being stored, why it’s being stored, and how much it will cost. There are typically four components impacting storage costs:
Size – How much storage do you need?
Data transfer (bandwidth) – How often does data move from one location to another?
Retrieval time – How quickly do you need to access the data?
Retrieval requests – How often do you need access to the data?
Depending on your answers to these questions, there are different ways to manage your environment using file storage, databases, data backup, and data archives. Organizations can estimate storage costs with a solid data lifecycle policy while right sizing and amplifying storage capacity and bandwidth.
Private Pricing Agreements
Another way to control your AWS spend is with a PPA or a Private Pricing Agreement – formally known as an EDP or Enterprise Discount Program. A PPA is a business-led pricing agreement with AWS that considers a specific term and commit amount. Organizations that are already in the cloud and love the service can use their expected growth over the next three or five years to get a discount for committing to that amount of time with AWS. In addition to expected compute services, reservations for reserved instances, and existing savings plans, the business also includes software purchases from the marketplace in the agreement to get further discounts.
Choosing a cloud optimization partner.
It’s easy to know what to do to control spend, but it’s a whole other beast to integrate cloud optimization into business initiatives and the culture of both IT teams and finance teams. Of course, you can go it alone if you have the internal cloud expertise required for optimization, but most businesses partner with an external cloud expert to avoid the expenses, risk, and time needed to see results. Attempting these strategies without an experienced partner can cost you more in the long run without achieving the ROI you expected.
In fact, when going it alone, businesses gain about 18% savings on average. While that may sound satisfying, companies that partner with the cloud experts at 2nd Watch average 40% savings on their compute expenses alone. How? We aim high, and so should you. Regardless of how you or your cloud optimization partner tackles cloud spend, target 90% or greater coverage in reserved instances and savings plans. In addition to the six pillars of optimization and PPAs, you or your partner also need to…
Know how to pick the right services and products for your business from the hundreds of thousands of options available.
Develop a comprehensive cloud strategy that goes beyond just optimizing cost.
Assess the overall infrastructure footprint to determine the effectiveness of serverless or containerization for higher efficiency.
Evaluate applications running on EC2 instances to identify opportunities for application modernization.
Take the next step in your cloud journey.
2nd Watch is a great choice for cloud spend optimization with AWS because we specialize in this area. With our extensive experience and in-depth knowledge of AWS services and pricing models, we can help you maximize your AWS investments. Our comprehensive solutions include cost analysis, budgeting, forecasting, and ongoing monitoring. We have a proven track record of delivering significant cost savings for our clients across various industries.
We leverage automation and advanced tools to identify cost-saving opportunities, eliminate waste, and optimize your AWS resources. This ensures efficiency and allows you to focus on innovation and growth. We provide continuous optimization and support, proactively identifying potential cost-saving measures and recommending adjustments based on your changing business needs.
With us, you’ll gain transparency into your AWS spend through detailed reports and analytics. This visibility empowers you to make informed decisions and manage your budgets effectively. Choose 2nd Watch for cloud spend optimization with AWS and experience the expertise, solutions, and track record that will help you achieve cost savings while driving innovation and growth.
2nd Watch saves organizations hundreds of thousands of dollars in the cloud every year, and we’d love to help you reallocate your cloud spend toward business innovation. Our experienced cloud experts work with your team to teach cloud optimization strategies that can be carried out independently in the future. As an AWS Premier Partner with 10 years of experience, 2nd Watch advisors know how to maximize your environment within budget so you can grow your business. Contact Us to learn more and get started!
Navigating the current BI and analytics landscape is often an overwhelming exercise. With buzzwords galore and price points all over the map, finding the right tool for your organization is a common challenge for CIOs and decision-makers. Given the pressure to become a data-driven company, the way business users analyze and interact with their data has lasting effects throughout the organization.
Looker, a recent addition to the Gartner Magic Quadrant, has a pricing model that differs from the per-user or per-server approach. Looker does not advertise their pricing model; instead, they provide a “custom-tailored” model based on a number of factors, including total users, types of users (viewer vs. editor), database connections, and scale of deployment.
Those who have been through the first enterprise BI wave (with tools such as Business Objects and Cognos) will be familiar with this approach, but others who have become accustomed to the SaaS software pricing model of “per user per month” may see an estimate higher than expected – especially when comparing to Power BI at $10/user per month. In this article, we’ll walk you through the reasons why Looker’s pricing is competitive in the market and what it offers that other tools do not.
Semantic and Governance Model
Unlike some of its competitors, Looker is not solely a reporting and dashboarding tool – it also acts as a data catalog across the enterprise. Looker requires users to think about their data and how they want their data defined across the enterprise.
Before you can start developing dashboards and visualizations, your organization must first define a semantic model (an abstraction of the database layer into business-friendly terms) using Looker’s native LookML scripting, which will then translate the business definitions into SQL. Centralizing the definitions of business metrics and models guarantees a single source of truth across departments. This will avoid a scenario where the finance department defines a metric differently than the sales or marketing teams, all while using the same underlying data. A common business model also eliminates the need for users to understand the relationships of tables and columns in the database, allowing for true self-service capabilities.
While it requires more upfront work, you will save yourself future headaches of debating why two different reports have different values or need to define the same business definitions in every dashboard you create.
By putting data governance front and center, your data team can make it easy for business users to create insightful dashboards in a few simple clicks.
Customization and Extensibility
At some point in the lifecycle of your analytics environment, there’s a high likelihood you will need to make some tweaks. Looker, for example, allows you to view and modify the SQL that is generated behind each visualization. While this may sound like a simple feature, a common pain point across analytics teams is trying to validate and tie out aggregations between a dashboard and the underlying database. Access to the underlying SQL not only lets analysts quickly debug a problem but also allows developers to tweak the auto-generated SQL to improve performance and deliver a better experience.
Another common complaint from users is the speed for IT to integrate data into the data warehouse. In the “old world” of Cognos and Business Objects, if your calculations were not defined in the framework model or universe, you would be unable to proceed without IT intervention. In the “new world” of Tableau, the dashboard and visualization are prioritized over the model. Looker brings the two approaches together with derived tables.
If your data warehouse doesn’t directly support a question you need to immediately answer, you can use Looker’s derived tables feature to create your own derived calculations. Derived tables allow you to create new tables that don’t already exist in your database. While it is not recommended to rely on derived tables for long-term analysis, it allows Looker users to immediately get speed-to-insight in parallel with the data development team incorporating it into the enterprise data integration plan.
Collaboration
Looker takes collaboration to a new level as every analyst gets their own sandbox. While this might sound like a recipe for disaster with “too many cooks in the kitchen,” Looker’s centrally defined, version-controlled business logic lives in the software for everyone to use, ensuring consistency across departments. Dashboards can easily be shared with colleagues by simply sending a URL or exporting directly to Google Drive, Dropbox, and S3. You can also send reports as PDFs and even schedule email delivery of dashboards, visualizations, or their underlying raw data in a flat file.
Embedded Analytics
Looker enables collaboration outside of your internal team. Suppliers, partners, and customers can get value out of your data thanks to the modern approach to embedded analytics. Looker makes it easy to embed dashboards, visuals, and interactive analytics to any webpage or portal because it works with your own data warehouse. You don’t have to create a new pipeline or pay for the cost of storing duplicate data in order to take advantage of embedded analytics.
So, is Looker worth the price?
Looker puts data governance front and center, which in itself is a decision your organization needs to make (govern first vs. build first). The addition of a centralized way to govern and manage your models is something that is often included as an additional cost in other tools, increasing the total investment when looking at competitors. If data governance and a centralized source of the truth is a critical feature of your analytics deployment, then the ability to manage this and avoid headaches of multiple versions of the truth makes Looker worth the cost.
If you’re interested in learning more or would like to see Looker in action, 2nd Watch has a full team of data consultants with experience and certifications in a number of BI platforms as well as a thorough understanding of how these tools can fit your unique needs. Get started with our data visualization starter pack.
Cloud adoption is becoming more popular across all industries, as it has proven to be reliable, efficient, and more secure as a software service. As cloud adoption increases, companies are faced with the issue of managing these new environments and their operations, ultimately impacting day-to-day business operations. Not only are IT professionals faced with the challenge of juggling their everyday work activities with managing their company’s cloud platforms but must do so in an timely, cost-efficient manner. Often, this requires hiring and training additional IT people—resources that are getting more and more difficult to find.
Managing your cloud operations on your own can seem like a daunting, tedious task that distracts from strategic business goals. A cloud managed service provider (MSP) monitors and maintains your cloud environments relieving IT from the day-to-day cloud operations, ensuring your business operates efficiently. This is not to say IT professionals are incapable of performing these responsibilities, but rather, outsourcing allows the IT professionals within your company to concentrate on the strategic operations of the business. In other words, you do what you do best, and the service provider takes care of the rest.
The alternative to an MSP is hiring and developing within your company the expertise necessary to keep up with the rapidly evolving cloud environment and cloud native technologies. Doing it yourself factors in a hiring process, training, and payroll costs.
While possible, maintaining your cloud environments internally might not be the most feasible option in the long run. Additionally, a private cloud environment can be costly and requires your applications are handled internally. Migrating to the public cloud or adopting hybrid cloud model allows companies flexibility, as they allow a service provider either partial or full control of their network infrastructure.
What are Managed Cloud Services?
Managed cloud services are the IT functions you give your service provider to handle, while still allowing you to handle the functions you want. Some examples of the management that service providers offer include:
Managed cloud database: A managed database puts some of your company’s most valuable assets and information into the hands of a complete team of experienced Database Administrators (DBAs). DBAs are available 24/7/365 to perform tasks such as database health monitoring, database user management, capacity planning and management, etc.
Managed cloud security services: The public cloud has many benefits, but with it also comes security risks. Security management is another important MSP service to consider for your business. A cloud managed service provider can prevent and detect security threats before they occur, while fully optimizing the benefits provided by a cloud environment.
Managed cloud optimization: The cloud can be costly, but only as costly as you allow it to be. An MSP can optimize cloud spend through consulting, implementation, tools, reporting services, and remediation.
Managed governance & compliance: Without proper governance, your organization can be exposed to security vulnerabilities. Should a disaster occur within your business, such as a cyberattack on a data center, MSPs offer disaster recovery services to minimize recovery downtime and data loss. A managed governance and compliance service with 2nd Watch helps your Chief Security and Compliance Officers maintain visibility and control over your public cloud environment to help achieve on-going, continuous compliance.
At 2nd Watch, our foundational services include a fully managed cloud environment with 24/7/365 support and industry leading SLAs. Our foundational services address the key needs to better manage spend, utilization, and operations.
What are the Benefits of a Cloud Managed Service Provider?
Using a Cloud Managed Service Provider comes with many benefits if you choose the right one.
Some of these benefits include, but are not limited to:
Cost savings: MSPs have experts that know how to efficiently utilize the cloud, so you get the most out of your resources while reducing cloud computing costs.
Increased data security: MSPs ensure proper safeguards are utilized while proactively monitoring and preventing potential threats to your security.
Increased employee production: With less time spent managing the cloud, your IT managers can focus on the strategic business operations.
24/7/365 management: Not only do MSPs take care of cloud management for you but do so 100% of the time.
Overall business improvement: When your cloud infrastructure is managed by a trusted cloud advisor, they can optimize your environments while simultaneously allowing time for you to focus on core business operations. They can also recommend cloud native solutions to further support the business agility required to compete.
Why Our Cloud Management Platform?
With cloud adoption increasing in popularity, choosing a managed cloud service provider to help with this process can be overwhelming. While there are many options, choosing one you can trust is important to the success of your business. 2nd Watch provides multi-cloud management across AWS, Azure, and GCP, and has a special emphasis of putting our customers before the cloud. Additionally, we use industry standard, cloud native tooling to prevent platform lock in.
The solutions we create at 2nd Watch are tailored to your business needs, creating a large and lasting impact on our clients. For example:
On average, 2nd Watch saves customers 41% more than if they managed the cloud themselves (based on customer data)
Customers experience increased efficiency in launching applications, adding an average 240 hours of productivity per year for your business
On average, we save customers 21% more than our competitors
Next Steps
2nd Watch helps customers at every step in their cloud journey, whether that’s cloud adoption or optimizing your current cloud environment to reduce costs. We can effectively manage your cloud, so you don’t have to. Contact us to get the most out of your cloud environment with a managed cloud service provider you can trust.
Cloud optimization is a continuous process specific to a company’s goals, but there are some staple best practices all optimization projects should follow. Here are our top 10.
1. Begin with the end in mind
Business leaders and stakeholders throughout the organization should know exactly what they’re trying to achieve with a cloud optimization project. Additionally, this goal should be revisited on a regular basis to make sure you remain on track to achievement. Create measures to gauge success at different points and follow the agreed upon order of operations to complete the process.
2. Create structure around governance and responsibility
Overprovisioning is one of the most common issues adding unnecessary costs to your bottom line. Implement specific and regulated structure around governance and responsibility for all teams involved in optimization to control any unnecessary provisioning. Check in regularly to make sure teams are following the structure and you only have the tools you need and are actively using.
3. Get all the Data you Need
Cloud optimization is a data-driven exercise. To be successful, you need insight into a range of data pieces. Not only do you need to identify what data you need and be able to get it, but you also need to know what data you’re missing and figure out how to get it. Collaborate with internal teams to make sure essential data isn’t siloed or already being collected. Additionally, regularly clean and validate data to ensure reliability for data-based decision making.
4. Implement Tagging Practices
To best utilize the data you have, organizing and maintaining it with strict tagging practices in necessary. Implement a system that works from more than just a technical standpoint. You can also use tagging to launch instances, control your auto parking methodology, or in scheduling. Tagging helps you understand the data and see what is driving spend. Whether it’s an environment tag, owner tag, or application tag, tagging provides clarity into spend, which is the key to optimization.
5. Gain Visibility into Spend
Tagging is one way to see where your spend is going, but it’s not the only way required. Manage accounts regularly to make sure inactive accounts aren’t continuing to be billed. Set up an internal mechanism to review with your app teams and hold them accountable. It can be as simple as a dashboard with tagging grading, as long as it lets the data speak for itself.
6. Hire the Right Technical Expertise
Get more out of your optimization with the right technical expertise on your internal team. Savvy technicians should work alongside the business teams to drive the goals of optimization throughout the process. Without collaboration between these departments, you risk moving in differing directions with multiple end goals in mind. For example, one team might be acting with performance or a technical aspect in mind without realizing the implication on optimization. Partnering with optimization experts can also keep teams aligned and moving toward the same goal.
7. Select the Right Tools and Stick with Them
Tools are a part of the optimization process, but they can’t solve problems alone. Additionally, there are an abundance of tools to choose from, many of which have similar functionality and outcomes. Find the right tools for your goals, facilitate adoption, and give them the time and data necessary to produce results. Don’t get distracted by every new, shiny tool available and the “tool champions” fighting for one over another. Avoid the costs of overprovisioning by checking usage regularly and maintaining the governance structure established throughout your teams.
8. Make sure your Tools are Working.
Never assume a tool or a process you’ve put in place is working. In fact, it’s better to assume it’s not working and consistently check its efficiency. This regular practice of confirming the tools you have are both useful and being used will help you avoid overprovisioning and unnecessary spending. For tools to be effective and serve their purpose, you need enough visibility to determine how the tool is contributing to your overall end goal.
9. Empower Someone to Drive the Process.
The number one call to action for anyone diving into optimization is to appoint a leader. Without someone specific, qualified, and active in managing the project with each stakeholder and team involved, you won’t accomplish your goals. Empower this leader internally to gain the respect and attention necessary for employees to understand the importance of continuous optimization and contribute on their part.
10. Partner with Experts.
Finding the right partner to help you optimize efficiently and effectively will make the process easier at every turn. Bringing in an external driver who has the know-how and experience to consult on strategy through implementation, management, and replication is a smart move with fast results.
2nd Watch takes a holistic approach to cloud optimization with a team of experienced data scientists and architects who help you maximize performance and returns on your cloud assets. Are you ready to start saving? Let us help you define your optimization strategy to meet your business needs and maximize your results. Contact Us to take the next step in your cloud journey.
Optimizing your cloud is essential for maximizing budgets, centralizing business units, making informed decisions, and driving performance. Regardless of whether you’re already in the cloud or you’re just beginning to consider migrating, you need to be aware of the challenges to optimization in order to avoid or overcome them and reach your optimization goals.
1. Complexity
The most pervasive challenge of optimization in the cloud is the complexity of the task. Regardless of the cloud platform – AWS, Azure, Google Cloud, or a hybrid cloud strategy – the intricacies are constantly evolving and changing. Trying to stay on top of that as an individual business requires a good amount of time, resources, and effort. Adding new tools and processes to your cloud requires integration, stakeholder agreement, data mining, analysis, and maintenance. While the potential outcomes from optimization are business-changing, it’s an ongoing process with many moving parts.
2. Governance
Standardized governance frameworks bring decentralized business units and disparate stakeholders together to accomplish business-wide objectives. Shared responsibility, from central IT to individual app teams, prevents the costly consequences of overprovisioning. While many organizations are knowingly overprovisioned, they can’t seem to solve the problem. Part of the issue is simply a lack of overall governance.
3. Data
Cloud optimization is a data driven exercise. If it’s not data driven, it’s not scalable. You need to maximize your data by knowing what data you have, where it is, and how to access it. Also important is knowing what data is missing. Many organizations believe they have complete metrics, but they’re not capturing and monitoring memory, which is a huge piece of the puzzle. In fact, memory is one of the most constrained points of data across organizations.
4. Visibility
Incredibly important within data discovery and data mapping is gaining visibility through tagging. Without an enforced and uniform tagging strategy as part of your governance structure, spend can increase without accounting for it. Tags provide insight into your cloud economics, letting you know who is spending what, what are they spending it on, and how much are they spending. It’s not uncommon to see larger organizations with a number of individual linked accounts and no one knows who they belong to. We’ve even found, after some digging, that the owners of those accounts haven’t been with the company for months! To get the cost saving benefits from cloud optimization, you need visibility throughout the process.
5. Technical expertise
You need a certain level of technical expertise and intuition to take advantage of all the ways you can optimize your cloud. Too often, techs aren’t necessarily thinking about optimization, but rather make decisions based on other performance or technical aspects. Without optimization at the forefront of these deterministic behaviors, the business drivers may not perform as expected. Partner with data scientists and architects to map connections between data, workloads, resources, financial mechanisms, and your cloud optimization goals.
Tools are part of the solution, but not the entire solution.
While tools can help with your cloud optimization process, they can’t solve these common challenges alone. Tools just don’t have the capability to solve your data gaps. In fact, one foundational issue with tools is the specific algorithms used to generate recommendations. Regardless of whether or not the tool has complete data, it will still make the same recommendations, thereby creating confusion and introducing new risks.
It takes work to get the best results. Someone has to first be able to deduce the information provided by your tools, then put it into context for the various decision makers and stakeholders, and finally, your application owners and businesses teams have to architect the optimization correctly to be able to take advantage of the savings.
In choosing the right tools to aid your optimization, be aware of ‘tool champions’ who create internal noise around decision making. New tools are launched almost daily, and different stakeholders are going to champion different tools.
Once you find a tool, stick with it. Give it a chance to fully integrate with your cloud, provide training, and encourage adoption for best results. The longer it’s a part of your infrastructure, the more it will be able to aid in optimization.
2nd Watch takes a holistic approach to cloud optimization from strategy and planning, to cost optimization, forecasting, modeling and analytics. Download our eBook to learn more about adopting a holistic approach to cloud cost optimization.
