Cloud Economics – Finding Your ROI

Cloud Economics – Finding Your ROI Sharon Wagner, Founder & CEO, Cloudyn

Cloudyn manages and optimizes thecost of cloud services “You can learn more about your use of cloud by subscribing to Cloudyn… It will help you continually get a clearer picture of real cloud use.” James Staten, VP Infrastructure and Operations

 SaaS solution, zero-integration Cloud analytics Real-time controls Consumption management Cloud optimization  Resources rightsizing  Price optimization  Deployment reallocation  Simulation & planning

• AWS product launch: Feb 2012• Support: Compute, Database & Storage• 300+ active customers• 1,250,000+ servers monitored• $250,000+ average customer cloud spend• 41% cost savings

Our Agenda Cloud Customer Use Case Some Interesting Cloud Research and Data Best Practices and Solutions

Customer Case StudyMeet Jim, IT Director of Energy & Co,a leading, global energy company. Energy & Co has a significant IaaS footprint • Multiple business units • Development, testing and production • Over 100 cloud accounts, 2000+ servers • Fluctuating environment

Customer Case StudyWhen we first met Jim… • Everything is under control • Cloud resources are perfectly provisioned • On-Demand offers optimal combo of cloud flexibility and ROI • Cloud costs cannot be reduced any further

Customer Case Study • 32 Extra Large servers running idle for 2 months • 3852 similar snapshots of a single volume • 11 reservations with no associated instances • 3 MySQL servers running Max 4.3% CPU utilization • 80% predicted growth in annual cost

Something is wrong!

Introducing CloudynDex™

While Monitoring ~1M Instances we noticed:• >50% of all instances run for less than 2 hours• ~30% run between 2 and 12 hours

• Average utilization < 17%• As instance size increases, utilization decreases• Many servers can be safely downscaled! Size % Instances Utilization (weighted) % Spend Small 74.4% 16.7% 36.0% Medium 18.1% 11.9% 31.3% Large 6.4% 7.8% 22.7% Extra Large 1.1% 3.9% 10.0%

Spot OnDemand Reserved70000600005000040000300002000010000 0 15-Apr-2012 15-May-2012

Use of Reservations Options Actual Break-Even 3% 2% 3% Light Utilization - 1 year 2.5 months26% Light Utilization - 3 years 3 months 35% Medium Utilization - 1 year 4 months Medium Utilization - 3 years 5-6 months 31% Heavy Utilization - 1 year 5-7 months Heavy Utilization - 3 years 11-13 months

You should seriously avoid…

New cloud vendor?Won’t work, transition is too expensiveChange pricing plan?You don’t really know what you needNegotiate terms with your vendor?You probably will get a $50 voucher

Best Practices

Real-time Analytics1 View and control usage, consumption, inefficiencies and cost drivers Right-sizing2 Downscale, shut-down and clean resources - avoid over-provisioning Price Optimization3 Select price plans and contract term changes to reduce cloud cost Plan & Simulation4 Realize, simulate and optimize the true cost of a business service

• Each environment is different• Define your underutilization threshold: Average, Spikes and Standard Dev.• It will become very economical when out-scaling

3Y-term, m1.large instance, Virginia “Light Utilization” break-even vs. ondemand = end oflock-in at 3 months

Monitor your deploymentTo know your cloudAvoid traditional capacity allocationsFor fine-tuned controlOver-provision to the right extentLeverage usage trends to right-size consumptionYour environment is dynamicYour solution should be dynamic too

Thank You.sharon@cloudyn.com

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Cloud Economics – Finding Your ROI

by Cloudyn on Sep 23, 2012

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