How Cloud Optimisation Helps Reduce Total Cost of Infrastructure Ownership
As the whole world is slowly awakening from several months of complete lockdown as a result of the COVID-19 outbreak, Cloud computing has started gaining even more steam it had before the pandemic. No wonder why the role of Cloud is becoming more crucial for business success nearly in every single niche and vertical. Today, companies are ready (or are forced in some cases) to go the extra mile to accelerate their pace of innovation and digital transformation. They’re craving to make a change they’ve always been apprehensive about in the pre-pandemic world. It’s becoming more apparent to businesses that digital transformation gives an excellent opportunity to not only survive in turbulent times but gain value-added benefits, too.
Let’s take a look at how Cloud optimisation can speed up and facilitate digital transformation and save costs.
How COVID-19 has affected businesses
Today, all businesses can be divided into three main categories based on how they’ve been affected by the pandemic:
- Companies specialised in eCommerce and online retail or providing essential online services like elearning, car-sharing, delivery etc. They are growing unexpectedly fast as a result of the pandemic. However, their local infrastructures were dated and not ready to handle the loads related to the influx in new users or increased number of transactions. So they have urgent short-term needs to modernise their internal systems and jump fast on the latest technology bandwagon to capitalise on the change caused by the Coronavirus.
- Companies in tourism and travel, HoReCa or offline retail. They’re taking a beating and facing substantial financial losses as a result of hibernation that the pandemic has pushed them to. These organisations are mostly focused on reducing operating costs, saving every penny and retaining as much in-house staff as possible. As such, cutting costs on IT infrastructure support is becoming critical to them.
- Companies unaffected by Corona that keep doing business as usual without any significant change.
What do all these companies have in common? Lack of clarity and understanding of what the future holds for them. No one knows now how the situation will unfold in the months to come. As a result of this frustration:
- Even companies that hit the jackpot and are doing good aren’t ready to increase their investments in IT infrastructure development and modernisation. They would lie doggo and wait rather than rush to increase their IT spending.
- Companies are shifting focus from building long-term strategies able to yield results and bring substantial benefits in 1–2 years to short-term plans able to bring more mediocre yet more tangible results in the short-run (within months or even weeks).
- Infrastructure scalability and effectiveness are becoming the top priority for the business. Organisations realise that their infrastructure should be able to adjust quickly to critical situations like we’re having now; otherwise, they won’t be able to stay afloat. Cloud allows for fast and flexible scaling while keeping costs low, as there’s no need to invest in data centers, physical servers, etc.
How Cloud fosters business resilience in turbulent times
Using virtual instances in Cloud proves to be an effective solution able to have a positive impact on business resilience. While this approach is well-known and familiar to many IT decision-makers, only few of them are ready to implement it before the pandemic. Cloud migration demands that companies revise their previous infrastructure investments, re-train and re-skill internal teams and change a myriad of business processes. Not many are ready to deal with all these changes; the majority would prefer not to challenge their status quo.
However, this is no longer going to be the case.
According to the State of the Cloud Report, as many as 82% of enterprises consider Cloud infrastructure spend optimisation to be their key priority for 2020. It’s a big challenge for about one-third of them. Respondents also estimated that about 30 % of their Cloud spend was wasted as a result of poor optimisation.
When businesses turn to us for Cloud-native architecture or Cloud budget optimisation, we hold a discovery workshop where we dive headlong in each particular case to understand the actual state of existing Cloud infrastructure. As such, we study the client’s technical documentation, invoices from Cloud service providers, tools and technologies used, the level of automation, etc. We also interview the key stakeholders, which allows us to compile a comprehensive report and use it for the development of both long-term and short-term Cloud strategy.
Evolve’s experience shows that short-term optimisation strategy can reduce Cloud budget by 15–30%, while long-term strategy can cut costs by 20–50%. That being said, even companies that have been hit hard by the Coronavirus can move to Cloud now to not only save costs but also speed up their time to recover and getting back on track.
Enterprise Cloud optimisation case: how to save 40% of Cloud expenses
One of our enterprise clients (name undisclosed due to NDA) was spending $300,000 a month just to support their Azure Cloud infrastructure. Our discovery showed that it had already been pretty well optimised. The client’s goal was to reduce this spend by 35% in order to retain their in-house development team. Two months later, we could decrease the client’s Cloud expenses to $180,000 per month, i.e. by 40%.
Here’s what we did:
- We’ve combined the development, QA and UAT (user acceptance testing) stages into a single Kubernetes virtual cluster.
- In a dedicated server pool, we’ve only retained workloads that are hard to re-start. We’ve used spot instances to maintain a minimum level of guaranteed compute resources.
- Thanks to automation, we’ve implemented an on-demand model for QA/UAT stages.
- We’ve made significant changes to resource profiling to reduce its performance and speed up time to production.
This case can trigger a question: why the hell did the company wait for so long to optimise their Cloud expenses? Why didn’t they do it before the pandemic? The answer is simple: the crisis has increased the brand’s understanding of what Cloud optimisation and cost-saving have in common and how crucial they are for business survival at the time of crisis. This understanding has pushed the company to make respective changes to its software code and make its DevOps team focus on creating a new approach to test both products and infrastructure.
Running own data centres has its bottlenecks such as
- very high total cost of ownership,
- low return of investment (ROI), and
- lack of scalability.
That’s one of the reasons pushing many firms to take advantage of hybrid Cloud.
The role of Hybrid Cloud and Multicloud in reduction of the total cost of IT infrastructure
According to IDG, more than 90% of organisations have at least one application already running in Cloud today. Almost 50% of companies are using hybrid Cloud, i.e., a mix of private and public Cloud. This trend continues to gain steam, as it proves to be the most profitable model from the viewpoint of ROI. But what’s even more important is the fact that you don’t need to overhaul your team, its habits and tools used.
One of the biggest issues facing companies today is a huge discrepancy between their existing infrastructure scalability and ever-growing market demands. Hybrid Cloud helps solve this issue, so this trend is likely to continue.
Although ⅔ of today’s businesses are using Cloud, the vast majority isn’t ready to move all of their business processes to Cloud just yet. As such, most companies are still keeping data centres and are only using Cloud to launch new projects. They still rely heavily on physical data centers for data sourcing, gathering and processing. As a result of this, businesses remain highly unscalable, which slows down their growth and grasp of technology.
Therefore, Multicloud seems to be the next big thing to gain traction in the business world after the pandemic. As such, DevOps engineers should be ready to cope with a shifted focus on Multicloud and workload mobility, which requires new skills, both soft and hard.
Skills and experience with container platforms and SaaS/PaaS solutions such as Google Anthos, OpenShift and VMware Taznu will be a must, so make sure to add them to your DevOps team before the demand is huge.
