Johannesburg, 01 Aug 2022
In an unpredictable economy with shifting business priorities, many IT leaders are now re-examining their IT spend. The first place they should be looking to control costs is their hybrid cloud environments, where hidden costs and waste can cause runaway spend, say Digicloud Africa and Google Cloud partner DotModus.
Louis van Schalkwyk, Head of Technical Operations at Digicloud Africa, says: “We’ve seen too many organisations commit to agreements for resources that they do not need and do not use. This is possibly the biggest waste of money we’re seeing today. Curbing this unnecessary expenditure requires proper planning, infrastructure optimisation and regular reviews.”
These reviews can be carried out in-house, or in consultation with an expert such as DotModus, a leading Google Cloud partner specialising in cloud infrastructure. “With a dedicated support team of Google Cloud experts, DotModus identifies opportunities for cost reduction and optimisation on any cloud environment to ensure customers are getting the most value from their cloud investment,” says Patrick Eriksen, Global Marketing Manager at DotModus.
The company regularly uncovers areas where applications and architecture have not been optimised to control unnecessary cloud expenditure, says Paul van Wyngaardt, Support Director at DotModus. “Recently, we conducted architecture reviews with cost optimisation, where we found one customer was incurring over R10 000 a month in unnecessary cloud expenditure due to forgotten provisions for development or unused disks. Another was wasting around 18% of their total monthly cloud spend on an app engine to host a solution that was no longer in use.”
Value vs cost
Digicloud Africa and DotModus note that moving to the cloud is seldom a cost-saving exercise. However, organisations can ensure they achieve the full value of the cloud, without having uncontrolled costs for services they don’t need or use.
Van Schalkwyk says: “Moving to the cloud is not necessarily about cutting costs. It’s about ensuring the money that you do spend on resources is done so in the most optimal and beneficial way with the least amount of wastage. Companies are creating their own unit economics models, where they calculate the cost of supplying or servicing a single unit, then building reporting out based on that.”
Van Wyngaardt adds: “Organisations need to realise the value and the outcome of the products they use through Google Cloud. In my experience, the value is only realised after a couple months of implementation.”
The tools of the cost optimisation trade
Van Schalkwyk says there are three primary tools for cost optimisation:
- Cost visibility – gaining a very clear view and understanding of cloud costs, per team or per workload. Factors such as budgets and quotas can be put in place to prevent runaway costs over time, with notifications and alerts set up to highlight overspending.
- Resource usage optimisation – avoiding wastage in the cloud by ensuring that only resources that are actually required are provisioned, and that no resources are idling, costing money while not delivering value. In this, there is considerable value in having a partner that reviews these regularly.
- Pricing efficiencies – taking advantage of available discounts to refine pricing based on actual usage.
Van Schalkwyk explains that Google has a number of cost optimisation features built into the console.
“These mechanisms allow customers to adjust their usage and products in order to achieve the best balance of cost versus performance while managing the customer’s appetite for committing to cloud infrastructure,” he says.
“These include SUDs – sustained use discounts. For no commitment at all, Google will automatically offer customers up to 30% discount on certain compute products when they are used for a full calendar month. The discounted percentage is calculated based on the percentage of time the resources are operational. Customers don’t need to do anything to activate SUDs – it’s automatic.”
For customers with somewhat stable and predictable vCPU and memory usage, CUDs – Google’s Committed Use Discount – offer a saving of up to 57% of their compute bill. CUDs are based on making a commitment to use a certain number of vCPUs and memory in a specific region for a period of one or three years.
“A nice feature of CUDs is that you’re not committing to specific VMs for a period of time, just to a number of vCPUs and memory. How you use those vCPUs and memory to configure machines is completely up to you. In addition, CUDs are shared across your entire organisation, meaning different departments with different workloads all benefit from a discounted rate secured at organisational level,” Van Schalkwyk says.
“Besides CUDs and SUDs, Google Cloud also offers right-sizing recommendations right in the console. For example, if you’ve provisioned a VM but Google sees that it’s over-specced based on utilisation, it’ll recommend that you scale the machine down in order to save costs.”
Cost optimisation with people and processes
For many organisations, moving from on-premises to the cloud also means moving from a capex to an opex model, says Van Schalkwyk.
“This means companies now have access to SKU level pricing for services they consume on an almost realtime basis, rather than approving purchasing hardware upfront. With this change, customers have to ensure they have processes in place to help people monitor the cost of their cloud infrastructure. Instead of just looking at your bill and saying ‘we spent $x on cloud VMs last month’, rather set up more meaningful analysis tools to report that it costs $x for resources to bring in revenue of $y,” he advises.
Implementing standardised processes from the get-go
Van Schalkwyk notes it is a lot easier to establish processes upfront than trying to implement them retrospectively. “The same goes with provisioning cloud resources: ensure you have a hierarchy and processes set up for your users when they need to provision new cloud resources. Labelling resources is crucial for accurately allocating costs to different teams or workloads. Ensure that the processes to label resources are set up from the start and ensure that only the engineers required to spin up new resources have the permissions to do so,” he says.
Van Wyngaardt adds that Google Cloud’s spend dashboard/data can also be edited to suit the needs of the business. “If a finance controller wants a dashboard that looks a certain way, you can build it in Google Data Studio. Google Data Studio allows businesses to build interactive dashboards and beautiful reports that inspire smarter business decisions,” he says.
Review and repeat for best results
The cloud, and tools provided from the cloud, are constantly evolving and changing, which makes regular reviews crucial, says Van Schalkwyk.
“If you’re spending a lot of time and money on cloud resources, then reviewing your cloud spend often with a team of people with different skills can help save a lot of money. Even saving a few percentage points off your bill every month will make a huge difference when you add it all up at the end of the year,” he says.
“Business and customer needs are forever changing. No matter how regularly you assess your cloud environment, there is almost always another opportunity for cost saving and optimisation,” Van Wyngaardt says.
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