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Tag: cloud waste

  • How Platform Engineering Can Drive Digital Sobriety

    How Platform Engineering Can Drive Digital Sobriety

    If we’re being honest, the “green issue” currently isn’t the priority it needs to be for a lot of companies. At best, they are ticking the box marked ‘sustainability’ and paying lip service to a trendy topic. At worst, they are engaging in nothing more than greenwashing.

    Considering carbon emissions from cloud computing have now overtaken those from commercial aviation, this is disheartening for the IT sector. Unsurprisingly, most of these emissions come from inefficient use of the cloud due to overly complex processes and a lack of centralized oversight over cloud infrastructures. And if “emissions” sounds a bit vague, here’s a translation into dollars–$147 billion was wasted in 2022 in cloud spend.

    So, when it comes to reducing an organization’s cloud carbon footprint, there is clearly a financial incentive. Even for those who don’t believe in individual responsibility or worse, simply don’t care what kind of world we’ll leave future (and some present) humans to live in, there is money to be saved.

    The truth is that companies need to put sustainability first across the whole enterprise, and they need to do it now.

    A New Kind of Business

    Tackling departments one-by-one or singling out individual processes to make them more sustainable is not going to work. What organizations need is to stop thinking of sustainability as an afterthought and start incorporating it in the decision-making process from the get-go, maybe even as part of their very business model.

    This is the sort of business that places its people and the planet above profits. Progressive, modern companies that want to stay in business longer need to invest in their people and take care of the planet instead of chasing endless growth and ever-increasing profit because that, simply put, cannot last.

    As a culture, we’re currently at a turning point–late-stage capitalism is running its course, and more people are realizing that constant growth at the expense of well-being and the planet’s dwindling resources is not sustainable (in all senses of the word).

    For this to work, it’s about looking at business through a new prism.

    Driving Digital Sustainability From the Ground Up

    It’s not too late for businesses to become more sustainable. In fact, it is the best time to make life-saving changes. When it comes to tech specifically, there are a couple of things you can do, starting with two key things that need to change.

    First, cloud waste has been costing companies billions of dollars for years now. Organizations are set to spend nearly $600 billion on the cloud in 2023, but it seems that most people are still in the dark about the real environmental impact of cloud usage. As with most big corporate changes, it’s all about a change of mindset. We need to accelerate awareness and promote digital sobriety to inspire transformation and decision-making with GreenOps on the enterprise level.

    A cloud-first approach has long been the holy grail of IT. However, what we couldn’t anticipate is the sheer volume of resource usage and complexity that comes with it. We simply do not have the planetary resources to support this growth much longer. It’s time to become smarter, leaner and more environmentally conscious by using the “consume better” approach.

    Second, think about the KPIs. Change without success parameters will not work. While organizations have a key role in decreasing global cloud spend, they must have the right tools and references. They need to be able to assess the environmental impact of their digital choices at all decision levels.

    For the IT sector, this is where platform engineering comes into play. An internal developer platform can act as the critical piece that connects DevX, deployments, governance, security and observability.

    With green best practices and cloud carbon footprint visibility at every stage–from the dev deploying a new environment on the cloud to the CFO checking the monthly cloud bill–a platform engineering approach ensures not only organizational but also individual responsibility. When all tools are accessible and processes transparent, nothing gets lost in translation. This means less room for error and cloud waste.

    Ultimately, it’s About Consuming Better and Consuming Less

    Right now, these KPIs will be financially motivated, and rightly so. But there will come a time when progressive organizations will put their environmental impact at the forefront of their mission statement.

    The B-Corp certification, which evaluates companies in terms of their social and environmental performance, grew 63% in 2022. This shows the trend toward moving to a more inclusive and sustainable economy. Partly because it’s in the interest of the businesses’ long-term success and reducing costs, but partly because it is simply the right thing to do.

  • How to Keep Your IT Infrastructure Invisible

    How to Keep Your IT Infrastructure Invisible

    IT infrastructure is critical. IT infrastructure enables businesses to run—from day-to-day operational execution to visionary strategic innovation and everything in between. What’s interesting, though, is that people are only aware of it when there’s a problem: HR can’t access the payroll application, customers are complaining about how slow the transactional system is or this month’s cloud bill was double what you expected it to be.

    No one should notice a well-orchestrated environment, but once application performance slows or an outage occurs, people start to grumble. The same is true for IT infrastructure.

    The Top Four Ways Your IT Infrastructure Can Become Undesirably Visible

    Given the complexity of modern hybrid/multi-cloud environments and the applications they support, it’s no surprise that countless things can go wrong—and when they do, your IT team takes the flack.

    If your infrastructure is humming along nicely, that’s a testament to the IT infrastructure team’s hard work and expertise. Sadly, they don’t get the recognition because it’s all invisible to the rest of the organization. It’s only when *BAM!* something happens that the team is scrutinized.

    While there are many ways this can manifest, it usually falls under one of the following four categories:

    • Availability — This may be the most catastrophic because when systems are unavailable, people can’t do whatever it is they need to do.
    • Performance — A system might be available, but that doesn’t mean it’s performing to SLA or user expectations. The result can range from minor annoyance to lost revenue and customer churn.
    • Cost — Runaway expenditures don’t necessarily affect users, but you do not want to be called to account by the finance team or, worse, executive leadership.
    • Compliance — This is another area that may not have a broad impact on user experience, but the repercussions of non-compliance can be financially and reputationally significant.

    Common Infrastructure Culprits and How to Address Them

    To ensure the necessary availability, performance, cost control and compliance to keep your IT infrastructure under the radar, you must understand what can cause problems in these areas. Here are eight common culprits, along with ways you can address them, so your IT team stays invisible.

    Broken or Misunderstood Dependencies
    Your infrastructure is a complex web of interdependent applications and services. Every time you make a change, it could have a rippling effect on the categories mentioned above. Automated discovery and service mapping capabilities enable you to easily trace dependencies throughout your infrastructure to avoid unintended consequences.

    Cloud Waste
    Chances are very high that you’ve got cloud waste. This means that you could be getting billed for a storage block that’s attached to a stopped instance, for compute instances that are not being used, or for unattached load balancers. Finding idle and abandoned resources can keep your monthly cloud bill under control and on budget.

    Un-Breakdownable Cloud Costs
    Cloud bills are notoriously complex, and while cloud providers do offer tools to help you analyze your cloud spend, those tools often don’t answer all the questions your business might have. In addition to adding clarity to such opaque expenses, you need to be able to parse your cloud spend based on what makes business sense to your organization, not what makes technical sense to your cloud provider.

    Poor Capacity Planning
    Your infrastructure needs to meet your business needs, which are continuously evolving. As changes happen, whether it’s increased utilization of existing resources or modified/added resources to support new requirements, workloads could push current capacity and impact performance and stability. You need to be able to forecast infrastructure demands against business objectives to minimize potential issues before they happen.

    Poor Workload Placement Decisions
    Your infrastructure consists of various environments each with its own characteristics. If you migrate a workload without understanding the implications of that particular environment, you could risk performance problems or spiking costs. To prevent this, you need any-to-any migration insights to make better decisions about workload priorities, groups and deployments.

    Poor Reservation Planning
    Reservations (i.e., reserved instances or programmatic discounts) offer discounts for committing to a particular plan. If you plan well, the savings can be significant. But if you don’t use the capacity you’ve bought, the savings might not materialize. To improve cloud resource planning, you need to be able to evaluate your potential savings in varied scenarios.

    Workload Drift
    Over time, your workloads evolve due to changing demand, data volumes, etc. As a result, they can outgrow their current configurations, leading to performance issues or rising costs. This is a natural result of business growth, so the goal isn’t to prevent that drift. Instead, you want to optimize capacity and cost on an ongoing basis to keep your workloads right-sized.

    Slow Problem Troubleshooting and Remediation
    No matter how many precautions you take, something somewhere will inevitably go wrong. And once you become aware of the situation, the clock starts ticking to find the cause and fix it, all of which takes time. The longer the entire process takes, the longer your infrastructure will be visibly and painfully not working as expected. For those cases, you need full-stack visibility with application-centric, AI-based analytics to minimize impact duration as much as possible.

    Keeping the engine running behind the curtain can be a daunting task, but with proper planning and management, your IT team will remain visible to those responsible for managing it and invisible to those in the rest of the organization. Of course, the complexity of today’s cloud infrastructure makes that challenging, and there will be IT fire drills that take place, but it’s about how IT leaders react to the situation and resolve it in the quickest way possible, allowing themselves to return to their preferred place in the shadows.

  • Four Steps to Avoiding a Cloud Cost Incident

    Four Steps to Avoiding a Cloud Cost Incident

    The recent Flexera 2022 State of the Cloud Report found that organizations waste 32% of their cloud spend, up from 3o% last year. This can be due to cloud cost incidents triggered by unused resources, malicious activity or overambitious projects and which have a massive financial impact if not found and corrected promptly.

    As an organization’s cloud infrastructure footprint matures, mapping cloud resource use and costs accurately to product lines, teams and business units becomes progressively more complicated and problematic. However, accurate cloud cost attribution is vital to understanding team resource use and determining accurate cost of goods sold (COGS) margins and is imperative to budgeting and forecasting. Organizations need reliable, granular views of the cloud environment to attribute costs back to departments and optimize a meaningful budget.

    Cloud cost spikes can blow up an organization’s budget fast and can be hard to track down, but enterprises can help protect themselves from a cloud cost incident with just a few simple steps.

    Have a Strong Tagging Strategy That Attributes Cost Granularly

    The cloud operations team needs to identify what is important to business reporting, which will help define and create a strategy for tagging. For instance, when an organization has two teams managing a particular service, the teams should safeguard the services tagged with a team identifier. Also, the teams should add another tag for the environment in which they’re running so they can allocate cloud costs across teams and environments.

    When an application uses numerous resources, like a database and storage, teams should consider adding a specific application tag and break down costs by each application. It should be noted that there is no one-size-fits-all tagging solution, so enterprises will need to determine what works and try out different strategies by adding and removing tags later.

    Understand Cloud Cost Ownership to Avoid Chaos

    Ask yourself how well your organization has attributed cloud costs to teams, applications or COGS. If the answer is “Not well,” then you are missing vital information about how your cloud costs relate to your business.

    The lack of this context or visibility into resource allocation makes it unmanageable and impossible for cloud operations owners and senior leaders to agree on who is responsible for varied expenses and resources. Manual cost attribution doesn’t scale accurately or account for shared cluster resource use across teams and applications. This creates confusion that can escalate when users arbitrarily slice data and claim ownership without accountability or clear visibility.

    What happens is that costs can sometimes be double-counted with two owners—or even missed completely with no owner whatsoever. The resulting data emerges as an inferior quality that is untrustworthy and not actionable. The inability to visualize resource use in context can dilute, hinder and even defeat cost improvement initiatives and optimization.

    Cloud costs should have an owner who can ensure that cloud spending is tied to business value. Understanding who owns which pieces will help pinpoint the cause.

    Establish and Monitor Cloud Budgets

    Historical data on cloud spending is gold—it can help forecast and budget for what should be happening with the cloud’s cost footprint. If that’s not happening, then it should be flagged and investigated.

    Once you get cost data under control, organizations can get an accurate picture of where cloud spending is taking place. However, does this match the expectations of spending? By establishing and monitoring budgets at every stage of a project, organizations can have guardrails to cloud spending and prevent costs from soaring out of control when engineers overallocate on performance “just in case.” Once budgets are in place, organizations can monitor spending and right-size resources to balance actual usage, rather than estimated usage at the start of execution.

    Over time, right-sizing resources will allow for optimal spend, as well as identify unused resources that can be shut down. Organizations should identify development and test instances left running when no longer needed and shut them off.

    Implement Cost Anomaly Detection

    Organizations can shield themselves from cost anomalies by continually monitoring and optimizing cloud costs. Cost anomaly detection can help act as a barrier to early recognition before they become problematic. This is especially effective when prompt, actionable alerts can be delivered directly to resource owners via Slack or email when their forecast exceeds the set budget. The best option would be adopting a cloud cost monitoring and optimization (CCMO) tool that gives alerts in real-time when a cost anomaly occurs. These tools must be able to detect anomalies and analyze their root cause, while also allowing visibility into what went wrong to avert similar future errors.

    Executing continuous cost monitoring and anomaly detection tools for dynamic cloud environments is essential in identifying any activity that doesn’t align with expected expenditure or diverges from an established pattern. With proper monitoring, organizations can take corrective measures before the fact.

    Unwanted and unexpected cost incidents can clean out an enterprise’s budget quickly, especially as its cloud infrastructure grows. Organizations need to practice these steps to gain a full picture view of their cloud environment.

  • How to Avoid Cloud Overspend

    How to Avoid Cloud Overspend

    Cloud overspend can have a major impact on a company’s bottom line. Here’s what organizations need to know

    Cloud technology has reached the stage of mainstream adoption across multiple industries, be it finance, health care, manufacturing or retail. According to a Research and Markets report, the global cloud computing market is expected to grow further to $832.1 billion by 2025, at a compound annual growth rate of 17.5% during the forecast period. However, with the expected increase in cloud usage, cloud waste is bound to increase. According to a report by Gartner, cloud waste is forecasted to reach $21 billion by 2021.

    Companies that are not aware of the factors that lead to cloud overspend will end up wasting a lot of money without even realizing it. This article discusses some of the reasons for cloud overspend and potential ways to optimize cloud usage and expenditure.

    1. Understand cloud better: One of the most prevalent reasons organizations overshoot their anticipated cloud usage is a general lack of understanding of cloud technologies. They often fail to make well-informed choices at the beginning of their journey to the cloud. Without truly understanding their business needs and the trends in their industry, they will opt for a one-size-fits-all approach, which frequently does not work. Gartner estimates that 70% of the global cloud overspend can be attributed to companies that do not have a defined plan for cloud cost management. An activity as simple as organizing data before a cloud migration can help organizations optimize cloud usage.
    2. Define a policy around cloud usage and associated expenditure: Organizations that do not have a defined strategy to navigate their cloud journey frequently end up with misaligned priorities that can lead to overspend. This lack of strategy manifests with different people and/or departments managing disconnected cloud initiatives that frequently are not aligned with the overall business goals or bound by governing policies, the result of which is typically out of control cloud sprawl. To avoid overspend due to a lack of governance and oversight, organizations should at the very least define these three controls at the start of their cloud journey:
      • Financial controls at multiple levels of the organization.
      • A project lead who coordinates, controls and manages cloud resources across the organization.
      • Resource quota policies to help prevent unanticipated spikes in usage.
    1. Control overprovisioned resources: According to a report by RightScale, approximately 40% of cloud instances are larger than needed for their workloads. The widespread perception that cloud technology is economical and affordable makes companies worry less about controlling the expansion of cloud instances. This often leads to the creation of unnecessary or oversized instances, resulting in shockingly large bills.
    2. Decommission idle and orphan resources: Continuous and thorough assessments help to identify and eliminate assets that are no longer used or required. The right assessment helps identify unattached volumes and orphaned assets that can be deleted. Investing in cloud cost optimization tools can assist with these assessments and reviews. Without a regular review of cloud resources, companies will continue to pay for resources that are no longer needed.
    3. Track vendor contracts regularly: Keeping a close watch on your vendor contracts governing licensing and subscription services is a complicated but necessary step to reduce cloud overspend. This becomes more critical for companies dealing with multiple vendors for different cloud services. Vendor contracts should be re-negotiated and fine-tuned at regular intervals to reduce subscription costs. These savings could be substantial in the long run.

    One of the most important steps on your journey to the cloud is finding the right partner that can assist you at every stage. Choose a technology partner that can help with not just implementation but also the management of your cloud instance. A strategic partner will help you leverage the cloud to drive business growth as well as scale your cloud usage and spend to suit your ever-changing business needs.

  • The Cloud Is Booming — But so Is Cloud Waste

    The Cloud Is Booming — But so Is Cloud Waste

    Fueled by the growth in cloud spend, cloud waste will exceed $17.6 billion in 2020.

    Over 90% of organizations will use public cloud services this year. In fact, public cloud customers will spend more than $50 billion on Infrastructure as a Service (IaaS) from providers such as AWS, Azure and Google. This boom is, of course, due to the broader adoption of public cloud services. But, it is also caused by the expansion of infrastructure within existing accounts. Not surprisingly, the growth in spending often exceeds the growth in business. That’s because a huge portion of what companies are spending on cloud is wasted.

    Cloud Computing Is Expanding

    Before getting to the waste, let’s look a little closer at the growth in the cloud sector. Gartner recently predicted that cloud services spending will grow 17% in 2020 and will reach $266.4 billion. While Software as a Service (SaaS) makes up the largest market segment at $116 billion, the fastest growing portion of cloud spend will continue to be IaaS. This will increase 24% year-over-year and surpass $50 billion in 2020.

    Typically, I find that about two-thirds of the average enterprise public cloud bill is spent on compute, which means about $33.3 billion this year will be spent on compute resources. Unfortunately, this portion of a cloud bill is particularly vulnerable to wasted spend. 

    Cloud Waste Is Also Expanding

    As cloud computing growth continues and cloud users mature, we might hope that this $50 billion is being put to optimal use. While I personally do find that cloud customers are more aware of the potential for wasted spending than they were just a few years ago, this does not seem to be correlated with cost optimized infrastructure from the beginning. The fact is, it’s simply not a default human behavior. 

    I frequently run reports for companies having issues with cloud waste. Invariably, I find wasted spend in these accounts. For example, one healthcare IT provider was found to be wasting up to $5.24 million annually on their cloud spend—an average of more than $1,000 per resource per year.

    Below is where the total waste is coming from.

    Idle Resources: Idle resources are VMs and instances being paid for by the hour, minute or second, that are not actually being used 24/7. Typically, these are non-production resources being used for development, staging, testing and QA. Based on data collected from our users, about 44% of their compute spend is on non-production resources. Most non-production resources are only used during a 40-hour work week, and do not need to run 24/7. That means that for the other 128 hours of the week (76%), the resources sit idle, but are still paid for.

    So, I find the following wasted spend from idle resources: $33.3 billion in compute spend, times 0.44 non-production, times 0.76 of week idle, equals to $11 billion wasted on idle cloud resources in 2020.

    Overprovisioned Resources: Another source of wasted cloud spend is overprovisioned infrastructure—that is, paying for resources are larger in capacity than needed. That means you’re paying for resource capacity you’re rarely (or never) using. About 40% of instances are sized at least one size larger than needed for their workloads. Just by reducing an instance by one size, the cost is reduced by 50%. Downsizing by two sizes saves 75%.

    The data I see in client infrastructure confirms this—and the problem may well be even larger. Infrastructure I see has an average CPU utilization of 4.9%. Of course, this could be skewed by the fact that resources I deal with are more commonly for non-production resources. However, it still paints a picture of gross underutilization, ripe for rightsizing and optimization.

    To take a conservative estimate of 40% of resources oversized by just one size, we see the following: $33 billion dollars in compute spend, times 0.4 oversized, times 0.5 overspend per oversized resource, equals to $6.6 billion wasted on oversized resources in 2020.

    The Extent of Wasted Cloud Spend

    Between idle and overprovisioned resources alone, that’s $17.6 billion in cloud spend that will be completely wasted this year. In fact, it could well be higher. Other sources of waste include orphaned volumes, inefficient containerization, underutilized databases, instances running on legacy resource types, unused reserved instances and more. Some of these result in significant one-off savings (such as deleting unattached volumes and old snapshots) whereas others can deliver regular monthly savings. 

    That’s a minimum of about $5 million wasted per day, every day this year, that could be reallocated toward other areas of the business. 

    It’s time to end wasted cloud spend. Perhaps acknowledging the extent of this problem is a good first step.

    — Jay Chapel

  • Cloud Waste To Hit Over $14 Billion in 2019

    Cloud Waste To Hit Over $14 Billion in 2019

     The good news to start 2019 is that cloud adoption is growing rapidly. Most people realize this, but along with major growth comes some less welcome news. Wasted cloud spend is also up—often dramatically. Chances are, if you’re spending money on cloud, some of that money is being wasted. For some, a lot of that money is being wasted. Here are the numbers.

    Predicted Cloud Spending 2019

    The latest predictions from Gartner estimate that overall IT spending will reach $3.8 trillion this year, a growth of 3.2 percent over IT spending in 2018. Of this spend, public cloud spending is expected to reach $206.2 billion—of which, the fastest growing segment is infrastructure as a service (IaaS), which Gartner says will grow 27.6 percent in 2019 to reach $39.5 billion, up from $31 billion in 2018.

    Now we can subdivide the public cloud spend number further to look just at compute resources—typically two-thirds of cloud spend is on compute, or about $26.3 billion. This segment of spend is especially vulnerable to waste, particularly from idle resources and oversized resources.

    Wasted Cloud Spending from Idle Resources

    Let’s first look at idle resources. This includes resources that are being paid for by the hour or minute, but that are not actually being used. Typically, this kind of waste occurs in non-production environments; that is, those used for development, testing, staging and QA. According to internal data available to my company, ParkMyCloud, about 44 percent of compute spend is on non-production resources.

    Most non-production resources are only used during a 40-hour work week, and do not need to run 24/7. That means that for the other 128 hours of the week (76 percent), the resources sit idle, but are still paid for.

    What does all this add up to?

    $26.3 billion in compute spend x 0.44 non-production x 0.76 of week idle = $8.8 billion wasted on idle cloud resources.

    Wasted Cloud Spending from Oversized Resources

    The other source of wasted cloud spend is oversized infrastructure; that is, paying for resources at a larger capacity than needed.

    RightScale found that 40 percent of instances were sized at least one size larger than needed for their workloads. Just by reducing an instance by one size, the cost is reduced by 50 percent. Downsizing by two sizes saves 75 percent.

    The data we see in our users’ infrastructure confirms this, and in fact we find that it may even be a conservative estimate. Infrastructure managed in our platform has an average CPU utilization of 4.9 percent. Of course, this doesn’t take memory into account, and could be skewed by the fact that resources managed are more commonly used for non-production resources. However, it still paints a picture of gross underutilization, ripe for rightsizing and optimization.

    If we take a conservative estimate of 40 percent of resources oversized by just one size, we find the following:

    $26.3 billion in compute spend x 0.4 oversized x 0.5 overspend per oversized resource = $5.3 billion wasted on oversized resources.

    Total Cloud Spending to be Wasted in 2019

    So, between idle resources and overprovisioning, wasted cloud spend will exceed $14.1 billion in 2019. In fact, this estimation of wasted cloud spend is probably low. This calculation doesn’t even account for waste accumulated through orphaned resources, suboptimal pricing options, misuse of reserved instances and more.

    Fortunately, cloud cost control is becoming top-of-mind as the industry is able to leverage cloud computing growth statistics to calculate the massive scale of this problem. If you are involved in your organization’s cloud  infrastructure, why not make reducing cloud waste one of your 2019 objectives?

    — Jay Chapel