cloud economics – finding your roi
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Cloud Economics – Finding Your ROI
Sharon Wagner, Founder & CEO, Cloudyn
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Cloudyn manages and optimizes the
cost 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
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SaaS solution, zero-integration
Cloud analytics
Real-time controls
Consumption management
Cloud optimization
Resources rightsizing
Price optimization
Deployment reallocation
Simulation & planning
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• 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
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Cloud Customer Use Case
Some Interesting Cloud
Research and Data
Best Practices and Solutions
Our Agenda
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Customer Case Study
Meet 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
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When we first met Jim…
Customer Case Study
• 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
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• 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
Customer Case Study
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Something is wrong!
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Introducing CloudynDex™
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While Monitoring ~1M Instances we noticed:
• >50% of all instances run for less than 2 hours
• ~30% run between 2 and 12 hours
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• 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%
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0
10000
20000
30000
40000
50000
60000
70000
Spot OnDemand Reserved
15-Apr-2012 15-May-2012
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2% 3%
35%
31%
26%
3%
Use of Reservations Options
Light Utilization - 1 year
Light Utilization - 3 years
Medium Utilization - 1 year
Medium Utilization - 3 years
Heavy Utilization - 1 year
Heavy Utilization - 3 years
Actual Break-Even
2.5 months
3 months
4 months
5-6 months
5-7 months
11-13 months
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You should seriously avoid…
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New cloud vendor?
Won’t work, transition is too expensive
Change pricing plan?
You don’t really know what you need
Negotiate terms with your vendor?
You probably will get a $50 voucher
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Best Practices
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Real-time Analytics
View and control usage, consumption, inefficiencies and cost drivers 1
Right-sizing
Downscale, shut-down and clean resources - avoid over-provisioning 2
Price Optimization
Select price plans and contract term changes to reduce cloud cost 3
Plan & Simulation
Realize, simulate and optimize the true cost of a business service 4
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• Each environment is different
• Define your underutilization threshold: Average, Spikes and Standard Dev.
• It will become very economical when out-scaling
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3Y-term, m1.large instance, Virginia
“Light Utilization” break-even vs. on-
demand = end of lock-in at 3 months
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Monitor your deployment
Avoid traditional capacity allocations
Over-provision to the right extent
Your environment is dynamic
To know your cloud
For fine-tuned control
Leverage usage trends to right-size consumption
Your solution should be dynamic too