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Shine a light on “Shadow IT”: Taking control of usage and spending in the cloud by Sharon Wagner, CEO and Founder of Cloudyn
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Shine a light on “Shadow IT”: Taking control of usage and spending in the cloud by Sharon Wagner, CEO and Founder of Cloudyn


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The ease to set up a cloud deployment--done with little more than a credit card and an internet connection-- has resulted in a decentralization of IT management for many enterprises. This booming …

The ease to set up a cloud deployment--done with little more than a credit card and an internet connection-- has resulted in a decentralization of IT management for many enterprises. This booming “Shadow IT” environment creates a host of management and cost issues for enterprises and usually leaves IT departments holding the bag. Very quickly, IT departments find themselves without control or even insight into the services being consumed, or even under-utilized, within their own organization. As independent units deploy in the cloud, the management and maintenance of these systems can lapse and quickly costs spiral out of control.

A smart IT manager quickly realizes that he/she needs to be able to gain visibility to the entire corporate cloud environment, centralize the management of the systems and create methods to do more with streamlined resources in the cloud – or face a potentially very nasty bill for cloud services at the end of each month.

For today’s IT departments to offer the best resources for the enterprise, the move to the cloud is becoming a necessity. To do this without loss of control, business and technology decision makers need to be able to see, measure and be notified on cost and consumption violations from day one. With this in place, IT’s management of cloud spending can be on budget and dynamically managed for optimal cost or performance improvements.

This session will walk CIO/IT managers through the key areas to consider in developing a cloud computing insight & management system and reporting mechanisms. It will also address why it is critical for IT to play a role in cloud development and management and some methods to help avoid circumvention of IT management within a “shadow” cloud.

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  • new approach to cloud cost managementLest start by outline the dynamics of cloud environments
  • Discover & Assess => Insight into Resources Consumption (Intelligently determine the most suitable vendor, configuration and economical model)Set Operational Controls => Set consumption and cost indicators.Align to corporate objectives => Insight into Cost Structure / Allocation models How much my projects / customers / business activities costin the Cloud? Am I on or off budget? Am I expected to be on or off budget?Set organizational Controls => Set thresholds and indicators for budget versus actual, resources allocation for various business units, etc.Act => Implement deployment optimization in terms of resources provisioning, pricing plans, and ??? (will there be different recommendations for the cost allocation alerts?)Rightsize your cloud cost and capacity based on actual use pattern
  • Meet Vincent, IT director of Antlers and Hooves Enterprise. The enterprise uses cloud for multiple business purposes: marketing campaigns, Hadoop processing of data and extension of corporate IT on holidays. For each business purpose, in addition to production, there are multiple development and testing environments. Vincent has dedicated accounts for each business unit but looking through management consoles at the deployments he has absolutely no idea what resources belong to which task, which of them are required at all and who’s responsible for what.  At the end of each month the bill becomes higher and higher. Each month Vincent needs to put someone for several days to manually map the resources to their owners. Vincent needs help to get the situation under control. What should be done?
  • Vincent Found: 15 Extra Large instances running 2 months after the marketing campaign was over3852 snapshots of a single volume11 Reservations that did not have the associated instancesCloud cost growing every dayGet full real-time visibility: Easily map the resources to the business tasksCalculate the cost of each task, including the history and the trendsAutomatically track deviations from norm Do the root cause analysis: Find the main cost contributorsQuickly find the cause of the budget deviationList of unused and underutilized resources may include:Unused reservationsForgotten instancesLeast-utilized instancesUnattached VolumesOld SnapshotsOver-sized databases
  • Vincent defined alerts to enable control:When number of instances grows by more than 5% in one dayWhen daily cost increases by more than 5%When monthly cost-to-date is higher by 5% than the same day previous monthWeekly and monthly costNow at least there won’t be any surprises!Track consumption trends to avoid unanticipated cloud cost:Measure your cloud resources consumption as it happensIdentify trends and spikes in usage and costSet automatic alerts to notify the deviation from planned budget and resources provisioningForecast the cost of each task [is this here? Or should it be in the organization controls?]
  • Insight into cost structure, budget management (plan vs. actual) and resources allocation (spending on each project / customer / business activity in the Cloud)Share data with the business:Allow each unit and task owner a dedicated view into his cost
  • Protective Foresight => be notified when approaching budget limits (total, or for specific tasks & business units)Involve relevant parties and endorse ownership:Alert relevant people so that the deviations are immediately handledset different alert thresholds for different roles: Task owners get alerts when the spend gets close to the budget limitsBusiness unit owners get aggregated alerts on the unit spend and “red” alerts for specific tasks
  • Implement deployment optimization in terms of resources provisioning & pricing plans, globally and for specific tasks / business unitsEliminate unneeded resources.Forgotten instancesUnused volumesOld snapshots Right-size your cloud.Make sure the instances you are using are just large enough for your needs. Do not over-provision: it’s easy to launch larger instance if required, so think small.RDS storage is easily grown. Use what you need.Pick the best matching pricing scheme.If appropriate – use spots. (Most effective with Hadoop)Use reservations. Light Utilization starts paying off after 2.5 months!Use cheaper regions if possible: us-east-1 and us-west-2 are your best bets in US. The latency differences between us-west-1 and us-west-2 are negligible in most cases, but the latter is cheaper.
  • new approach to cloud cost managementLest start by outline the dynamics of cloud environments
  • Transcript

    • 1. 1 Shine a Light on Shadow IT Effective Cloud Cost Management Sharon Wagner, CloudSlam ‘12
    • 2. 2 Outline Introduction, Cloud in Shadow IT Cloud cost management process Customer case study and lesson learned Summary, questions and answers |
    • 3. 3 About Me Director of Product Management, Oblicore Sr. Principal, Cloud Connected Enterprise, CA Founder and CEO, Cloudyn |
    • 4. 4 Shadow IT is here to stay “IT controls less than 50% of corporate technology expenditures”, PwC , June 2011 “In less than three years, 35% of enterprise IT expenditures will happen outside of the corporate IT budget.”, Gartner, Dec 2011 Cloud vendors doing their best to increase adoption Variety of services Provisioning agility Resources availability Continuously decreasing cost |
    • 5. 6 Aligning IT to business demands IT Control Cloud Adoption Business Agility |
    • 6. 7 Both IT and the business are: Losing cost Control Unable to maximize Investment Can’t plan Over-provisioning Capacity resources | | Cloudyn Confidential and Proprietary
    • 7. 8 | | Cloudyn Confidential and Proprietary
    • 8. 9 If you can’t beat them, join them! Leverage your domain expertise Know all cloud options Find the best business terms Streamline your cost management process |
    • 9. 10 Effective cloud cost management Based on feedback from key enterprises with $1M+ cloud spend annually Discover & Assess Act, Change, Optimize Set Operational Controls Set Organizational Align to Corporate Controls Goals |
    • 10. 11 Energy & Co case study and lesson learned A World wide energy company Jim is an IT director Energy & Co has a significant IaaS footprint Multiple business units Development, testing and production what Over 100 cloud accounts, +2000 servers resources Fluctuating environment belong to which task? How will I explain this bill to my boss? What resources are REALLY needed? |
    • 11. 12 Understand your cloud resources consumption • 32 Extra Large servers running idle for 2 months Discover & Assess Set • 3852 snapshots of a single volume Act, Change, Optimize Operational Controls Set Align to • 11 reservations with no associated instances Organization al Controls Corporate Goals • 3 non-production databases running in 4.3% CPU utilization • 80% predicted growth in annual cost Taking care of these reduces cost by 34% |
    • 12. 13 Control resource consumption in real-time Discover & First, set operational alerts: Act, Change, Assess Set Optimize Operational Controls Daily growth in # of instances exceeds 5% Set Align to Organization Corporate al Controls Goals Weekly growth in cost exceeds 5% Unused resources Underutilized servers, databases Now at least there won’t be any surprises for Jim! |
    • 13. 14 Define cost units and break-down the spending Map cloud resources to business units Discover & Assess Act, Change, Set Optimize Operational Define business units Controls Set Align to Define resource mapping rules Organization Corporate al Controls Goals Define budget structure Define owners Set cost and consumption views Spending became clearer: Jim could see who spends what, where and when |
    • 14. 15 Have unit owners control their costs Discover & Assess Set business metrics Act, Change, Set Optimize Operational Controls Budget violation projection Set Align to Organization Corporate al Controls Goals Abnormal consumption growth Cloud usage inefficiency Correlate cloud cost with business activities Now control was delegated to the unit owners, with Jim supervision |
    • 15. 16 Usage-based cost and capacity optimization Rightsizing first: Discover & Assess Act, Change, Set Constantly eliminate unused resources Optimize Operational Controls Downscale overgrown instances Set Align to Organization corporate Get rid of retired storage al Controls Goals Price optimization to follow: Optimally reserve instances based on usage Reallocate resources to existing reservations Eventually the bill dropped by ~35% ! |
    • 16. 17 Summary Enhance your domain expertise Know your cloud options Think small – avoid traditional capacity allocation For fine-grained control Over-provision to the right extent Leverage usage trends to rightsize consumption Your environment is dynamic Your solution should be dynamic too |
    • 17. 18 Thank You Cloud Economics @cloudyn_buzz