Cloud Cost Optimization Best Practices

Cloud Cost Optimization Best Practices

cloud cost optimization

As cloud adoption continues to skyrocket, managing costs is a concern for most organizations. How can you control cloud spend and achieve the best value for your investments?

Industry Trends and Innovations in Cloud Cost Optimization

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 5, our experts provide practical strategies to help organizations effectively manage cloud expenditures.

The panel also provides valuable insights on:

  • Best practices for cloud cost optimization, including starting small and gradually increasing expenditure as the business grows.
  • Establishing a cloud Center of Excellence to promote best practices, consolidate purchasing, and accelerate deployments.
  • Reviewing cloud infrastructure spending, renegotiating discounts with cloud providers, and focusing on price-performance and efficiency.

Download the Why Data Warehouses Are Ground Zero for Cloud Cost Optimization Constellation Report for more strategies on managing cloud spend.

Transcript:

Mark Cusack:
Yeah, very briefly and I think I’d assert to Doug’s point a second ago is that we are not seeing cloud data warehouse vendors passing on savings, or performance from the increasingly released generations, for example, of Intel chipsets here.

And at Yellowbrick we’re very aggressive to move to the later generations. We already support Ice Lake, we previously supported Cascade Lake. We’re going to be evaluating Sapphire Rapids soon.

And what we do is pass those performance improvements directly onto the customer in the spirit of transparency. And I think there’s a trend in amongst some vendors to treat new generations of chipsets and improvements in performance as an opportunity to keep the performance as the user experiences the same, but just pocket the difference in terms of reduced infrastructure costs on their side.

That’s what I’m hearing and seeing myself.

Heather Brodbeck:
Okay. All right, thanks. And we’ll keep with you just on the next topic. So what can we learn from the best-performing organizations?

So I know you know all spend a lot of time talking with different tech leaders. What do you see most successful organizations doing with respect to cloud costs and where’s the pressure being applied, if there’s pressure, to find savings in cloud?

Do you want to start Mark?

Mark Cusack:

Yeah, and kind of goes back to my point earlier. I think customers and companies these days are taking a really conservative, cautious aspect to making changes to their cloud expenditure.

They want to see the business value and the return on investment being realized before they make big commitments. And in fact, we’re seeing this.

In fact, a lot of cloud data warehouse companies whose business really relies on consumption and on-demand pricing, we’ve seen a drop off in consumption.

And you have to look at some of the end-of-year reports from some of the other publicly listed cloud vendors to see some of the messages that are around dropping off of consumption there as well.

So I think the message is: the best practice is to start small, grow your expenditure as your business grows.

There are going to be opportunities – and Doug mentioned it at the start – at the top of this call, around are there situations where you might want to move that workload into your own data center as well, in certain circumstances. And it’d be interesting to see how that trend changes over the next few years.

But again, to key in on Doug’s point around putting in cost controls, guardrails, these are things that we’ve built into Yellowbrick so you can’t burst out of your cloud expenditure limits.

Putting alerts based on here, but more importantly just push your vendor for more transparency about where your money is going at the end of the day and really, really scrutinize what value you’re getting from that investment with them.

Heather Brodbeck:
Okay, thanks. Arijit we’ll go back to you.

I know you had mentioned already in our last topic that you’d recommended always have a method for continually reviewing what your licensing model is and if it still fits with your business model.

Do you want to expand at all, all on that around what you see in Intel?

Arijit Bandyopadhyay:
Yeah. … the context, given the aspects of how you are growing to the ISV of choice. Yeah, I think this will be … You are able to map it to what your CIO’s requirements are.

Heather Brodbeck:
Okay, thank you. Doug, you work with a lot of organizations. Any insights or advice for the group here?

Doug Henschen:
Well, I think the most successful organizations have a cloud center of excellence of some sort, even if they don’t call it that. So I would establish one. This is a centralized team, often has a FinOps approach with finance IT and the business represented. And it’s there to provide guidelines, to promote best practices, to consolidate purchasing.

Sometimes organizations don’t know across the organization what they’re purchasing and they’re not taking advantage of discounts they can get.

And the best of these organizations aren’t these bureaucratic departments of “no,” they’re really helping to accelerate deployments and adoption. Both with the processes that they establish – the expertise that they provide – and they’re helping companies to avoid unplanned adoption and poor post-merger integration.

I would also make sure that … Most successful companies are employing cost optimization policies and guardrails.

Examples include right-sizing those compute instances, and we talked about vendors helping you with that. Restricting permissible instance types, we see some runaway use of instance types sometimes that might be ill-advised.

Shutting down workloads automatically after hours, obviously making sure that this isn’t a planned and anticipated and required after-hour workload. Setting up expiration dates for unused storage.

I would also check for cost-saving options from public cloud providers or from third-party service providers. One example NetApp Spot is a spend reduction service that can often yield sizable discounts because they’re reselling unused reserve instance capacity.

So there’s a lot going on out there in FinOps and cost reduction and a lot to explore. And again, my report includes some of the recommendations on some of these things.

Heather Brodbeck:
Great. Okay. Thank you. We’re about 10 minutes left into our last topic here, which is really just takeaways from the discussion today.

So obviously not everybody is super technical and maybe doesn’t know all the right questions to ask. So any advice from the three of you? What would maybe be the top three questions they should be asking and who should they be asking?

So Doug, you went into some of that just now, but did you want to make it more pointed for the group?

Doug Henschen:
Yeah, I’d say the only way to take control is to really get in there and get your hands dirty and take control. And you could start with the recommendations in my report, which include establishing that cloud center of excellence, setting benchmarks, reviewing architecture, modernizing for the cloud.

Making use of public cloud and third-party management tools, employing cost optimization policies and guardrails. And again, all of these recommendations are detailed in the report and anybody watching this discussion is going to get a copy of that.

Heather Brodbeck:
Okay, great. Thanks. Arijit, over to you. Any recommendations for the group here of who to ask and what to ask?

Arijit Bandyopadhyay:
Call it “optimization and performance,” software, hardware, processor, all of that, cloud. It’s quite a varied landscape. Keep current, reach out to the ISV, or reach out to Intel and as a neutral party, we’ll be able to guide you.

And it’s to our benefit and it’s one of our goals that when you are deploying any workload, and data warehouse definitely, that you’re doing it and getting the bank for the buck, getting the right performance, and doing it within the cost envelope that you always want.

Heather Brodbeck:
Okay, great. Thank you. Mark, anything that you’d like to add for the group on the call today?

Mark Cusack:
Yeah, I mean I know Heather, you mentioned upfront that managing the cloud budget can be a super technical exercise. But I think we’re at that point where you have to roll your sleeves up and start to really drill into how much I’m spending on my cloud infrastructure to support my cloud data warehousing needs.

I mentioned earlier there are very, very few levers, particularly as software-as-a-service delivered cloud data warehousing, that you have control over.

So I would really look at, am I getting the best value for money out of my cloud data warehouse vendor today? How can I take control myself on where I spend a cloud infrastructure level?

How can I renegotiate my discounts with the cloud providers so I have a complete line of sight from the bare instances that I’m spinning up to support my data warehousing to what value I’m getting out of this?

And I think we’re at a point in an economic climate where it would be fiscally irresponsible not to take that level of scrutiny seriously, frankly.

And as I said, you really have to get into the details. I totally advocate Doug’s mention of companies like NetApp Spot, a great opportunity to just also take external services and see if you can use the internal market for reselling cloud capacity and take advantage of that to reduce your own costs as well.

But at the end of the day, really, really think about, am I getting the best price-performance? Am I pulling the most efficiency out of the infrastructure that I’m deploying my data warehousing on? I think is my overriding recommendation.

Heather Brodbeck:
Okay. All right. Thank you. And I know we just have a few minutes left, so I’m not going to open up an additional topic, but just want to thank the three of you for joining today.

I learned a lot on this call actually, it was great. Doug, looking forward to getting your report and reading through that.

And then for anybody that joined, definitely just like Arijit said, and I’m sure Mark and Doug agree – if there’s any follow-up questions or looking for any guidance on anything to get connected, feel free to reach out to any of us for that.

So I think we will end here. Thank you all.

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