Data Warehouses: The Key to Cloud Cost Optimization

Data Warehouses: The Key to Cloud Cost Optimization

Cloud cost optimization

Cloud cost optimization has become a necessary concern for businesses in an ever-changing economic landscape. As cloud spending continues rising, organizations seek strategies to optimize cloud expenditures and maximize efficiency.

The Importance of Data Warehouses for 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 explore cloud cost optimization and data warehousing.

In Episode 1, our experts delve into the critical role that data warehouses in play driving cost efficiency in the cloud.

Key Findings from the Constellation Report: Why Data Warehouses Are Ground Zero for Cloud Cost Optimization

Doug Henschen presents the latest research from the Constellation Report Why Data Warehouses Are Ground Zero for Cloud Cost Optimization. Doug highlights key points including:

  • The critical role of data warehouse services in cloud cost optimization.
  • Why enterprises transitioning to the cloud face a crossroads in managing cloud spend, particularly in cloud data warehousing and managed services.
  • How data warehouses play a critical role in modern enterprises.
  • Despite concerns about a recession and rising cloud costs, many CXOs anticipate spending as much or more on technology in 2023.
  • Why optimizing existing cloud usage is a top priority for cloud customers.
  • The emergence of FinOps and the need for collaboration between finance, IT, and business.

The webinar also offers valuable strategies and best practices for managing cloud costs, maximizing the value of your enterprise data, and achieving your business goals.

The panel also discusses:

  • The growing importance of FinOps to plan and control cloud migrations, workloads, and spend.
  • How data warehouses contribute to cloud cost optimization.
  • Recommendations and insights to help organizations make informed decisions about their cloud infrastructure and drive efficiency.

Doug Henschen:

Great to be here. And to recap a bit of my report on why data warehouse services are ground zero for cloud cost optimization.

Now, I’m happy to say that folks watching today’s discussion are going to get a free copy of this report. It’s loaded with lots of recommendations on how you can take control of data warehouse costs. And many of these points we’re going to be discussing today.

Now, the first reason I started writing this report late last year was all the talk of recession and growing complaints about cloud costs. And if you’d turn to that next slide, Heather, you wouldn’t know we’re in a recession talking to CXOs about their 2023 budgets.

Now, we explored this topic as part of our Constellation CXO confidence survey published last November and found that the majority of the 78 C-suite respondents that were in our survey overwhelmingly expected to spend as much or more on technology in 2023 as they did in 2022.

As you see here, 59, nearly 60% raised their 2023 tech budgets either slightly, moderately, or significantly. Yet paradoxically, when we ask these respondents whether 2023 would bring a better business climate than 2022, nearly 70% said no.

So the bottom line, businesses are preparing for worsening conditions and the recent layoffs we’ve seen. This week’s banking crisis offers fresh evidence that these fears were well-founded. So tech budgets and cloud expenditures are going under the microscope.

If we turn to the next slide, still further evidence is offered by the Flexera State of the Cloud Report. Now, the 2022 installment of that very venerable respected report found that nearly 60% of cloud customers named optimizing existing use of the cloud as their number one priority.

So let’s face it, cloud expenditures have been growing for years. Companies that are spending much more time on cloud cost optimization and the trend has given rise to the so-called FinOps movement.

Now, FinOps is not about financial operations. It’s a mashup of the words finance and DevOps, and it’s about finance, IT, and the business working together to plan their cloud migrations, plan their cloud workloads, and optimize their spend in the cloud.

Now, if we turn to the next slide, we see yet more evidence that companies are frustrated with cloud costs and are even starting to move workloads back to on-premises data centers.

Now, this study was released in February. It’s not my report, but it was by IT asset management vendor Device 42. And I thought some of the findings were pretty startling. 50% of the 300 respondents said they’re going to continue to rely on these on-premises data centers.

Only 13% said that cloud had delivered on the promise of cost savings. 50% said they don’t even know exactly what type of infrastructure they have in the cloud.

80% said the cloud is expensive and getting more expensive. And this was the thing that really stunned me. 20% said they have moved or planned to move certain workloads back to on-premises data centers.

And we’ve talked to some data warehouse practitioners, for example. When they have steady, consistent workloads, they don’t need the elasticity, serverless, all that. They’ve moved some of these workloads back on on-premises. And all of this is fertile fuel for today’s discussion.

Let’s turn to my final slide. The second reason I wrote this research is that cloud data warehouses are not only storage and compute intensive. They’re also quite popular, ranking as the number one platform as a service offering in use by cloud customers. This is according to the Flexera study.

38% of light cloud users, 54% of moderate cloud users, 60% of heavy cloud users, using data warehouse cloud services. The second most popular choice of this nature is transactional databases.

So yeah, number one, that’s the number one reason we’re talking about it. There’s much more in that report including those recommendations, but I think these points set the stage for today’s conversation and I know we’ll have some thought-provoking advice and comments to share. So back to you Heather.

Heather Brodbeck:

Okay, thanks, Doug. Appreciate that. All right, well let’s go over to Mark.

Maybe you could share a little bit. Is this resonating with you? I know you spent a lot of time with Yellowbrick’s customers and also with our prospects, so what are your thoughts?

Mark Cusack:

Yeah, it’s not a surprise to me at all that we are still seeing this trend of data warehousing being the most widely used component in the cloud data estate because traditionally, that’s always been the case. You think of the privileged position a data warehouse has within a business.

It’s usually tied to the most upstream data sources and the most downstream consumers within a business. It’s a critical piece. It’s the crown jewel in terms of data management in most enterprises. And as enterprises transition to the cloud, that status of the data warehouse remains.

But I do think to Doug’s point, a lot of customers are at a crossroads right now in terms of their cloud spend. CFOs are taking those cloud line items and cloud data warehousing SaaS spend and scrutinizing them under the microscope.

As we go into the economic headwinds, we see higher interest rates. This is a really important component to address. And I think one of the issues that arises, particularly in cloud data warehousing and managed services offerings here, the number of levers you can pull and turn to tune and bring those costs of data warehousing in the cloud under control, that there’s fewer there than there’s traditionally been in an on-prem operating environment.

So I think there’s going to be … CFOs will be drilling into the spend. They want these, more controls, and I think that’s what customers are telling me.

Heather Brodbeck:

Okay, great. Thank you. All right, let’s see. I get some thoughts from Arijit on this. What are your thoughts on that and how does Intel deal with cloud spend?

Arijit Bandyopadhyay:

Yeah, thanks, Heather. So I think in any enterprise, if you look at it, the data warehouse, whether it’s in a hybrid mode or in a cloud SaaS capability or in PaaS or whichever the deployment model is, it becomes the fundamental fulcrum of the standard architecture of the enterprise.

Whether you treat it as a record of origin or a record of reference. So managing that in terms of performance, in terms of cost savings, and in terms of the overall power saving, providing all those things that I talked about, and as well as cost savings from the hardware or performance optimizations and capabilities. So from the Intel disrupter program and which Yellowbrick is a part of.

So we help in various ways and then there are these aspects of what we work with the different hyperscalers or the OEMs of choice for what we call the center of excellence with Intel and our partners. And that also helps.

So it is the most important cost factor. There are various ways to manage it. The customer and the ISV, they have to be intelligent in how they handle this, and understanding it is very, very important.

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