Managing cloud expenses and optimizing costs are critical challenges faced by many organizations. Today’s CFOs face many challenges in controlling cloud spend for both SaaS and cloud data warehousing solutions.
When buying cloud services, most organizations buy cloud as managed service packages. How can you save costs when dealing with virtual machines, operating systems, storage, security, or data warehouses?
How CFOs Can Put Better Controls Around Cloud Spend
In this webinar series, industry experts Arijit Bandyopadhyay from Intel®, Doug Henschen from Constellation Research, and Mark Cusack and Heather Brodbeck from Yellowbrick Data Warehouse explore cloud cost optimization and data warehousing.
In Episode 2, our experts discuss how CFOs can better control cloud spend.
Challenges and Strategies for Cloud Cost Control
The webinar explores the challenges faced by CFOs in controlling SaaS expenses and shares cost-effective strategies for better control and transparency around software as a service.
The panel also provides valuable insights on:
- How to navigate the lack of transparency in pricing and margins, enabling you to understand your expenses.
- Effective strategies for CFOs to put better controls around cloud spend.
- Optimizing cloud costs and enhancing control and visibility by procuring infrastructure and storage directly from cloud providers.
- How automation can simplify data warehousing deployment and provisioning, empowering your team to manage and scale operations effectively.
- How to align platform costs with business growth, ensuring your cloud data warehouse can scale seamlessly with your organization.
Learn valuable tips and actionable insights to help you navigate the complex realm of cloud spend. We’ll explore how you can scale as your business grows and reduce cloud costs.
Download the Why Data Warehouses Are Ground Zero for Cloud Cost Optimization Constellation Report for more strategies on managing cloud spend.
Transcript:
Heather Brodbeck:
Well, let’s maybe pivot to our next topic, saving money when things are packaged as a managed service. When buying cloud services, you inevitably buy some sort of package service, whether it’s a virtual machine, operating systems, storage, security, or data warehouse.
How do you start to save costs when so much seems to be outside of your control?
Maybe, Mark, we’ll start with you on that.
Mark Cusack:
Yeah, and I think we’re getting to the heart of the matter here really, to my last point about how can CFOs scrutinize and put better controls in place around spend, around software as a service.
And if we focus on data warehousing in cloud and managed services around that aspect in particular, there’s no transparency here. And of course, from a user experience, it’s easy to consume this stuff. Everything scales elastically behind the scenes.
But of course, what’s happening under the hood is these cloud data warehouse SaaS vendors are essentially operating cloud infrastructure on your behalf, and they’re going further than that. They’re picking the cloud hardware, they’re doing and they’re marking up those prices and selling it back to you at a larger margin.
So what you get with a lot of SaaS vendors is this margin stacking effect, which at the end of the day, impacts how much you are going to pay, and you have very, very little transparency and ability to understand what you are spending on here.
And another aspect I’ve seen as a trend, and I’m hearing from a lot of prospects and customers, is that a lot of cloud vendors in this space have then therefore the freedom to reduce their own infrastructure overheads.
They’ll pick Graviton processes in AWS for example, but they’re not necessarily passing on the price performance benefits to the end SaaS customer here, because all of that is kept as transparent in terms of the infrastructure.
And so they’re able to change the infrastructure, increase their margins at that level, but we are not seeing those cost savings passing onto end users because of that lack of transparency.
Heather Brodbeck:
Okay. Thanks. Doug, any thoughts to add to that topic?
Doug Henschen:
In addition to providing that transparency that Mark is talking about, it’s also helpful if vendors can give customers the option to procure infrastructure and/or storage capacity through their public cloud provider.
Now, sometimes vendors pass through storage costs, for example, but not always compute. Usually, as Mark mentioned, that’s sometimes kind of an abstract scheme that they have for their own. But buying directly from the cloud provider not only lets you take advantage of discounts, it also helps to meet any buying commitments that you made in order to meet those discounts.
So in cases where customers can buy compute capacity within their own accounts, they also typically have more control, more visibility, more transparency, and the vendors then are typically offering advice on best-fit configurations.
Mark Cusack:
The arguments in the past around providing this, pulling open the curtain, and exposing a lot of this infrastructure is it increases complexity on the consumer, on the customer’s side of things. And customers get concerned about – does this mean I have to change my skillsets in my company to include more cloud operations expertise, expertise in Kubernetes, and other things like this?
And I think we’ve come a long way in software maturity in data warehousing the cloud where you can automate the deployment and provisioning of data warehousing. Even though you get to see the underlying infrastructure, once you put automation layers around this, you can really lower the barrier to operating this yourself. So I think you can have your cake and eat it here.
You can have automated control around how you provision data warehousing, but you are paying for the infrastructure yourself, and to Doug’s point, you’re taking advantage of all the enterprise agreements you’ve got in place with the cloud service providers to help reduce your costs there.
Heather Brodbeck:
Okay, great. Thanks. And we can move to Arijit, maybe the same topic here, but anything you can share on Intel and your experience working with cloud providers?
Arijit Bandyopadhyay:
Yeah. So I think we have been working with all the hyperscalers. We have varied offerings, whether there is a Yellowbrick or a Snowflake or a Databricks or any of those… Companies like Rockset, in the Intel Disrupter program, they are part and parcel of engaging with them and managing it from the angle of performance, and that is an important element to consider both from…
The second one is the cost savings in general, so we do the optimizations with respect to our processors but also with respect to the instance definitions. So we basically look at the newer technologies and the newer evolutions in the workload and map that to our processors, extensions, software optimizations, as well as working them up before this comes onto the hyperscalers in terms of how things are optimized.
So what’s important I think for the customers is to understand this in a 360-degree way. Just don’t look at it from one dimension.
Heather Brodbeck:
We’ll end with you on this topic and get into the next one. So how do platform costs align with growth? Are there economies of scale here and how should people think about that?
Mark Cusack:
Yeah, and I’m definitely seeing a trend in the conversations I’m having around customers who want to start small in the cloud and expand and grow as their business scales. That’s critically important.
They want to start at a low price point but know that whatever cloud data warehousing solution they have will scale as their business grows and they will invest in that data warehousing solution in line with business growth here.
And I’m having a lot of conversations with existing cloud data warehouse users today that are concerned about that starting point and the ability for some of these solutions to scale quickly as their business grows as well.
So that’s what I’m seeing. It’s really, customers are unwilling necessary to make an upfront, serious commitment. They want to see value from their cloud data warehousing solution and they want to be able to scale that over time as their business grows.
Doug Henschen:
Yeah, I’ve got to agree with that one. I see oftentimes, companies choose a tool expediently, and then later on, they find that it can’t scale to where they want to go.
So even if you’re starting small, you’ve got to have a vision about where you’re going and that vision should recognize possibilities like mergers and acquisitions, big pushes in marketing that you didn’t have previously. You’ve got to look long term.
Heather Brodbeck:
Okay, thanks, Doug.
