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How to Set Up a Cloud Cost Optimization Process for your Enterprise
The document outlines a strategy for establishing a cloud cost optimization process within enterprises, emphasizing the need for a dedicated team with key skills and executive sponsorship. It covers the complexity of cloud billing, the necessity of effective cost allocation, and the benefits of automation in managing and optimizing cloud expenses. Additionally, it discusses different cost-saving measures, including rightsizing instances and understanding reserved instance options from major cloud providers.
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How to Set Up a Cloud Cost Optimization Process for your Enterprise
- 1. HOW TO SETUP A CLOUD COST OPTIMIZATION PROCESS FOR YOUR ENTERPRISE
- 2. • Brandon Willer •Director, Cloud Cost Strategy, RightScale • Megan Crandell • Product Manager, RightScale Presenters
- 3. • Cloud CostTrends in the Market • Setting up your Cost Optimization Team • The Challenge of Cloud Bills • The Cost Optimization Process • Automated Policies • Ins/Outs of RIs Agenda 2
- 4. Two Solutions fromRightScale RightScale Cloud Management Platform Orchestrate, automate and govern workloads across all your environments. VIRTUAL SERVERS PUBLIC CLOUDS ANY CLOUD SERVICE PRIVATE CLOUDS BARE METAL SERVERS CONTAINER CLUSTERS RightScale Optima Work collaboratively across the organization to manage and optimize clouds costs. Orchestration Cloud Workflow Plugins Monitoring Access Control Accounts/Groups Access/Permissions Tags Policies Cost Security/Compliance Operational RIGHTSCALE CMP ENGINE EXTENSIBLE ORCHESTRATION API
- 5. Cloud Spend isGrowing 4
- 6. Much of CloudSpend is Wasted 5
- 7. Cost Optimization isTop Focus 6
- 8. Companies in EarlyStages of Optimizing Costs 7
- 9.
- 10. • Hundreds of thousandsto millions of line items each month • Need mechanism to consume massive amounts of data Cloud Bills Kill Spreadsheets 9
- 11. Cost Allocation -Need to breakup/showback to owners 10 Priority Tags Accounts 1 env=test 2 env=prod 3 dept=qa 4 756122054 Allocation Rules Billing Centers Dev CS Sales Prod Dev Support Demo Marketing Demo Child Billing Centers
- 12. • Vast differencebetween cloud providers in how they bill • Cloud products are priced differently (e.g. - GB vs. Hours) Not All Cloud Bills Are Made Equal 11
- 13. Assess, Plan, Execute,Automate Assess Allocate Plan Collaborate Action Automate Govern
- 14. • Need costchampions and a dedicated team • Key skill sets are financial analyst, project management, and basic technical background. • Need sponsorship from mgmt Setting up an Internal Cost Optimization Team 13 Financial / Data Analyst Project Management Cloud Technologist Executive Sponsorship
- 15. Assess: Uncover Opportunitiesto Save Assess Allocate Plan Collaborate Action Automate Connect Cloud Bills Uncover Waste Identify Actual Opportunities Prioritize
- 16. Allocate: Assign Costsfor Showback Reporting Assess Allocate Plan Collaborate Collaborate Automate “Bucket” costs into hierarchical groups, for example: ● Dev Teams ● Business Units ● Departments Combination of account or tag grouping Action
- 17. Allocate: Provide Reportsfor Cloud Users Assess Allocate Plan Collaborate Collaborate Automate ● Build Custom Reports and Dashboard ● Define Budget Alerts when costs are forecast to exceed plan Action
- 18. Plan: Key Areasof Focus Assess Allocate Plan Collaborate Action Automate IaaS Savings ● RightSizing - Relaunching with appropriately sized instances ● Instance Scheduling - Turn off during non-working hours ● Low cost regions - Move to geographically close locations ● Superseded Instances - Migrate to newer, cheaper instance types ● Azure AHUB Reserved Instance Discounts ● Existing RI or CUD Modification ● New RI or CUD Purchase Plan Storage Savings ● Unattached Volumes & snapshots ● Redundancy options (AZ vs regional) ● Lifecycle management (Hot/Cool/Cold) ● Migration to Azure GPv2 Tiering ● Premium to Standard Disk PaaS Savings ● Optimize Backup policies ● Rightsizing PaaS Discounts ● RedShift ● RDS ● ElastiCache ● DynamoDB
- 19. Plan: Build actionableplan to remove waste Assess Allocate Plan Collaborate Action Automate Use initial assessment as springboard for action Tackle costs based on lowest hanging fruit first Many cost saving activities are dependent on one another, build project plan
- 20. Collaborate: Work withresource owners Assess Allocate Plan Collaborate Collaborate Automate Find owners of resources to reduce waste Needs to be evidence based. Build cost analysis for each mini-project Share recommendations using RightScale or shared spreadsheets Action
- 21. Action: Basic ProjectManagement Assess Allocate Plan Collaborate Collaborate Automate Define scope and build plan Schedule resource owners and execute on deliverables Analyze and track savings Action
- 22. Automate: Implement AutomatedOutcomes Assess Allocate Plan Collaborate Collaborate Automate Setup automated policies ● Automatically delete unused storage ● Automatically resize overprovisioned instances ● Notifications when resources untagged Action
- 23.
- 24. Breaking Down aPolicy
- 25. • Out-of-the-box andcustom policies • One policy engine across all your clouds & services • Policies for any resource, regardless of how provisioned • Combine and test data from any API-enabled data source • Take any action on any API-enabled cloud/web services • Powerful workflow language for robust logic and actions What’s Unique About RightScale Policies 24
- 26. From Alert Onlyto Fully Automated Resolution 25 Alert only Alert Approval Automated resolution Fully automated resolution Move toward full automation as you gain confidence in policy conditions
- 27. Policy Incidents • PolicyIncidents are triggered events (email or action). • Full history and audit trail can be found in the Incidents page, along with all detail associated with that incident.
- 28.
- 29. • AWS • ReservedInstances (RIs) • Enterprise Discount Program (EDP) • Azure • Reserved Instances (RIs) • Enterprise Agreement (EA) • Google • Sustained Use Discounts (SUD) • Committed Use Discounts (CUD) • “Negotiated” Discount Discounts by Cloud Provider
- 30. In exchange forthe discount you must: • Commit for 1 year or 3 years • Agree to specific parameters that limit where the discount can be applied • Pay up front and/or agree to pay for the RI monthly even if you don’t use it It’s like buying a gym membership - you pay even if you don’t go. What Is a Reserved Instance (RI) 29 A discount “coupon” that will be applied to a running cloud instance that meets the parameters of the RI you purchased
- 31. RIs Are NotAlways the Best Way to Save 30 Savings for RI based on m5.large running Linux in US East. RI savings will vary based on instance type and region
- 32. AWS RIs AzureRIs Google CUDs Buying Parameters Region or AZ Instance family or size Operating system Network type (VPC, Classic) Region Instance family Instance size Scope (Subscription, Shared) Region Project-scoped Machine type (General purpose or Memory-optimized) Exchangeable Convertible RIs: Yes Standard RIs: No Yes No Changeable Standard RIs: AZ (if Regional), Network, Instance size (if Regional and Linux) Yes, by exchanging or you can just change Scope Apply flexibly across vCPU and memory units consumed Returnable Can sell on Marketplace (often impossible to find buyers) Yes - return fee is 12% of remaining value No Payment Options No Upfront Partial Upfront All Upfront All Upfront No Upfront AWS/Azure RIs, Google CUDs: Key Differences
- 33. Example Usage/Cost Pattern Productionand 24x7 dev usage Weekday dev usage * Data from real (anonymous) customer use cases
- 34. Example Coverage x% coverageof steady-state 33
- 35. Understanding Reserved InstanceCoverage 100 instances 50 Reserved Instances 50% RI coverage 50% On-Demand pricing
- 36. Reserved Instance PurchasePlan 35
- 37. Monitor & ManageUtilization of Existing RIs 36
- 38. Instance Size Flexibility xlarge large large mediummedium medium medium large medium medium Original footprint Option 1 Option 2 Option 3 Modify RIs within instance family …
- 39. AWS Convertible RIs,Exchanging Azure RIs RI value $100 RI value $50 RI value $50 RI value $30 RI value $30 RI value $30 RI value $30 RI value $50 RI value $30 RI value $30 Prorated value of RI Equal trade Pay $20 true up Convert or Exchange RIs based on value Pay $10 true up
- 40. • RI recommendationsfrom your cloud sales rep will be self-serving • They want you locked into their cloud • Consider other savings opportunities • Consider future changes in cloud use • Think coverage % • 100% coverage is almost never right • Carefully plan your RI purchases • Track utilization and adjust RIs as you go • Plan for how you will allocate costs RI Takeaways 39
- 41. You need toolsto manage cloud cost complexity Put in place a team to focus on cloud cost management Identify savings opportunities Make sure you can allocate and report costs across the org Project management and collaboration are key Automated policies help you keep things optimized RI planning and monitoring is an ongoing focus Summary 40
- 42. Contact sales@rightscale.com formore info Q&A 41