Money Pitfalls and Failed Expectations: Optimizing Essentials for the Cloud
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Cloud promised a simple pay-as-you-go approach to technology, with cost-savings at the top of the agenda. But data from 451 Research finds that costs are a major issue for enterprises as new pricing models, services and features introduce waste and complexity into the procurement process. In this webinar, we examine the challenge facing enterprises and find a level of intricacy that can’t be solved using manual process – tools and expertise are needed.
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Money Pitfalls and Failed Expectations: Optimizing Essentials for the Cloud
- 1. Copyright (C) 2018 451 Research LLC Money Pitfalls and Failed Expectations: Optimizing Essentials for the Cloud March 20, 2018 451 Research and 2nd Watch William Fellows & Owen Rogers 451 Research Willy Sennott 2nd Watch
- 2. William Fellows Founder & Research Vice President Willy Sennott Director, Data Science & Optimization 2 Owen Rogers Research Director, Digital Economics Unit
- 3. Housekeeping Items: Questions? A copy of the presentation will be provided to all attendeesPresentation Slides Feedback To ask a question, click on the question button Don’t forget to leave feedback at the end of the webinar
- 4. Money pitfalls and failed expectations: optimizing essentials for the cloud Owen Rogers and William Fellows
- 5. 451 Research is a leading IT research & advisory company 5 Founded in 2000 250+ employees, including over 120 analysts 1,000+ clients: Technology & Service providers, corporate advisory, finance, professional services, and IT decision makers 85,000+ IT professionals, business users and consumers in our research community Over 52 million data points published each quarter and 4,500+ reports published each year 2,000+ technology & service providers under coverage 451 Research and its sister company, Uptime Institute, are the two divisions of The 451 Group Headquartered in New York City, with offices in London, Boston, San Francisco, Washington DC, Austin, Mexico, Costa Rica, Brazil, Spain, UAE, Russia, Taiwan, Singapore and Malaysia Research & Data Advisory Events Go 2 Market
- 6. Covering the technology and services, economics and business models driving enterprise cloud transformation, and the re-invention of the IT industry. Cloud Transformation 6
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- 8. Sea change in attitude towards use of public cloud 8 It takes a village New normal More buying, less building Market value accelerating 90% of companies in cloud by 2019 cloud first-> cloud only 60% of IT deployment will be off-premise by 2019 90% of Fortune 100 use a partner to access AWS 17% CAGR Hosting, Cloud & Managed Services $125bn 2018(E) “
- 9. The Cloud Transformation Journey Great Expectations lead to a Brave New World • Great Expectations drive cloud adoption • Cloud costs reach Wuthering Heights • A mix of War and Peace breaks out as CIOs control consumption • Optimizing consumption drives a Brave New World 9
- 10. CLOUD TRANSFORMATION WORKLOADS AND KEY PROJECTS 2017 Source: 451 Research, Voice of the Enterprise: Cloud Transformation, Organizational Dynamics 2017 Q42. What are the key factors in building the business case for cloud-computing investments at your organization? 10 38.8% 32.2% 32.0% 26.9% 23.5% Cost savings Resource scalability based on application/workload demands Time to market/agility Improved availability/uptime Less to manage internally n = 490 Great Expectations Cost is biggest driver of moving to the cloud
- 13. CLOUD TRANSFORMATION WORKLOADS AND KEY PROJECTS 2017 Q53. What are the top IT pain points in your organization? Please select up to 3. 13 53.2% 46.6% 43.3% 29.2% 27.2% 26.0% 24.0% 9.7% 2.6% Cost/budget Security issues/concerns Responding effectively to changing business requirements Managing legacy infrastructure Insufficient staff Dealing with new applications/projects Skills shortage Vendor management Other n = 534 Source: 451 Research, Voice of the Enterprise: Cloud Transformation, Vendor Evaluations 2017 Percent of Sample Wuthering Heights Costs out of Control
- 15. CLOUD TRANSFORMATION WORKLOADS AND KEY PROJECTS 2017 Source: 451 Research, Voice of the Enterprise: Cloud Transformation, Organizational Dynamics 2017 Q35. How would you describe your organization’s approach to cloud governance with line of business owners? 15 34.2% 26.9% 18.6% 13.1% 7.3% We have formal policies and cloud offerings that the line of business can use. We put some governance rules in place with the line of business spending on cloud. We track cloud spending with the line of business, but don’t control it. We know there is cloud spending in the line of business, but we don’t track it. We have no idea what the line of business are spending on cloud, if anything. n = 521 War and Peace IT Departments Fight Back with Governance Controls
- 17. Increasingly complex landscape 17 2ft Approximate number of AWS SKUs today
- 18. CLOUD TRANSFORMATION WORKLOADS AND KEY PROJECTS 2017 Source: 451 Research, Voice of the Enterprise: Cloud Transformation, Workloads and Key Projects 2017 Q21. Which of the following statements best describes how your organization will use different on-premises and off-premises cloud environments over the next 2 years? 18 38.4% 28.6% 20.4% 12.6% We will focus primarily on a single cloud environment, not multiple clouds. We will have multiple different cloud environments, but there will be little to no interoperability between the cloud environments. We will have multiple cloud environments to migrate workloads or data between different cloud environments. We will have multiple cloud environments where the delivery of a single business function across the different cloud environments is seamless. Percent of Sample n = 437 Rise of multi-cloud raising complexity
- 19. ++ Shortage of skills exacerbates cloud management 19 Q. What categories of skills are most acutely lacking when it comes to cloud computing environment management? Select all that apply. (Base: currently facing cloud skills shortages) Source: Voice of the Enterprise, Cloud Transformation, Organizational Dynamics, 2017 57% of Organizations Face Skills Shortages in Cloud Expertise, Adversely Impacting Digital Transformation 30% of Organizations Find it “Very Difficult” to Recruit for the Required Cloud Expertise
- 20. CLOUD TRANSFORMATION WORKLOADS AND KEY PROJECTS 2017 Source: 451 Research, Voice of the Enterprise: Hosting and Cloud Managed Services, Vendor Evaluations 2017 Q17. How does your organization purchase managed services or security services in connection with infrastructure services from your vendor, if at all? Please select all that apply. 20 29.3% 28.2% 19.7% 13.3% 12.8% 10.1% 3.2% We do not purchase any management or security services in connection with the infrastructure services We purchase third-party management or security tools, and apply using our own IT resources and staff The infrastructure vendor bundles management and security services with the infrastructure service We buy services from a third-party managed service provider, separate from the infrastructure engagement A managed service partner of the infrastructure vendor supplies management and security as part of the infrastructure engagement We buy services from a managed service provider who sources the infrastructure from a third party (i.e., a public cloud vendor) Other Percent of Sample n = 188 Outsourced management and tooling is now the norm in cloud
- 21. Conclusions • Cost-savings are a key driver of cloud adoption • But post-migration, costs rapidly get out of control due to easier and cheaper access to resources • Governance controls and pricing models go some way to stemming costs • For cloud to be value-adding to business, optimization must be done on an ongoing basis to enable easy access once again, but at a lower cost • Problem is likely to get worse as a result of increasing complexity, multi-cloud, and skills gap • Manual optimization is not viable in such a complex world • The use of service providers and tooling is commonplace today 21
- 22. Willy Sennott Director, Data Science and Optimization 2nd Watch 22
- 23. Journey to Optimized Willy Sennott
- 24. KEY CONSIDERATIONS PRIOR TO OPTIMIZATION Cash Flow Position What is your annual budget for cloud? Overall budget, budget by business unit or project, etc. BUDGET Seasonal Cycles Do you expect to migrate additional workloads to the cloud? How do you expect your existing workloads to grow or shrink? What new workloads are going to be built in the cloud? GROWTH Maturity of Applications Can your non-production workloads be turned off overnight and/or on weekends? Do you have resources to support application changes required to support autoscale and spot usage? SUPPORT
- 25. Eliminate Waste/Best Practices •Unused Resources •Elastic Load Balancers •Elastic IP addresses •Unused volumes •Unnecessary Snapshots •Business rules by environment (Prod vs Dev and Test) Reserved Instance Portfolio Strategy •Review overall environment to determine RI Purchasing strategy •Utilize multiple pricing and term vehicles (such as convertible and standard) to layer in RI’s throughout the optimization process Auto Park •Identify workloads that do not have a 24x7 requirement •Schedule shutdowns during non essential times Right Size •Use most efficient instance sizes •Analyze historical data and trends •Identify all future known events •Apply recommendations to both EC2 and RDS and over-provisioned PIOPS volumes •New Instance types and Instance Family updates Spot Usage •Identify workloads where spot usage is appropriate New Services •Review opportunities for re-architecture based on new or enhanced technologies. (Lambda and other serverless options) Onboarding Monitoring Right Sizing Initiative RI Purchases Quarterly Optimization Review Yearly Optimization Review OPTIMIZATION METHODOLOGY
- 26. Optimization – Pillar Overlap Reserved Instances OperationsAnalysis ROI RI’s Right Sizing Family Refresh Auto Park Spot Waste: 1) Idle Load- balances, 2) Unattached Volumes and 3) Other Re-Architecture and Best practice changes
- 27. Questions?