cloud economics – finding your roi
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Cloud Economics – Finding Your ROI
Sharon Wagner, Founder & CEO, Cloudyn
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
SaaS solution, zero-integration
Cloud analytics
Real-time controls
Consumption management
Cloud optimization
Resources rightsizing
Price optimization
Deployment reallocation
Simulation & planning
• 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
Cloud Customer Use Case
Some Interesting Cloud
Research and Data
Best Practices and Solutions
Our Agenda
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
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
• 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
Something is wrong!
Introducing CloudynDex™
While Monitoring ~1M Instances we noticed:
• >50% of all instances run for less than 2 hours
• ~30% run between 2 and 12 hours
• 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%
0
10000
20000
30000
40000
50000
60000
70000
Spot OnDemand Reserved
15-Apr-2012 15-May-2012
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
You should seriously avoid…
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
Best Practices
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
• Each environment is different
• Define your underutilization threshold: Average, Spikes and Standard Dev.
• It will become very economical when out-scaling
3Y-term, m1.large instance, Virginia
“Light Utilization” break-even vs. on-
demand = end of lock-in at 3 months
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
