Insights

Why cloud optimisation is about more than cost

In my experience, unmanaged cloud costs can quickly escalate. Apart from rising costs, wasted capacity and pressure from the business to curb costs, there may be underlying issues that will negatively affect application performance. The solution is proper cost management, which includes understanding your cloud spend and reaping benefits beyond cost savings.

In this blog, I look at three key reasons for cloud cost optimisation and the benefits they’ll bring to your organisation.

1. Predictability of cloud costs 
2. Service stability, performance, and scalability 
3. Aligning innovation and cost optimisation 

Reason #1 Predictability of IT costs 

Improved cost management leads to better financial planning and predictability, which is essential for long-term strategic planning – that is a fact. When it comes to cloud costs, certainty around spend helps to ensure that allocated budgets are used effectively. Reducing excess cloud costs also promotes reinvestment into other strategic initiatives, such as digital transformation. 

Cloud costs stability can be improved by doing the following: 

• Organisations should settle on optimal architectures and configurations that minimise their cost footprint by simplifying configuration, maintenance and security.  

• You should implement processes and controls for cloud management that most align with organisational need. This would cover all areas of FinOps practice cloud, optimal architecture patterns, and cloud cost optimisation. You should carefully consider the model of how this is best done to ensure that it can be effectively achieved in the organisation.  

• Cloud tooling is not a complete solution. But it does have a role to play alongside the umbrella cloud optimisation processes and procedures that you adopt.  

• Invest and remove constraints on newly migrated cloud applications. 

Reason #2 Service stability, performance and scalability 

When migrating to the cloud, some applications might not be fully cloud capable. In addition, technical debt – prioritising speed over quality – becomes more apparent, as it’s often masked in the on-host situation. This results in inefficient applications that are unable to consistently deliver the required performance, stability and scalability.  

Additionally, this is exacerbated due to a sharper focus on ensuring patterns of deployment that support availability, resilience and security. In these circumstances, cloud operating costs are invariably higher. 

To resolve the service issues, you have to look deeper into the nature of the service and the underlying the causes. This can be likened to an iceberg where high cloud costs sit above the water line and service technical debt sits below. Without first tackling the service issues, your options to reduce cloud costs will be limited. At the same time resolving key service issues that lead to poor stability, performance, and scalability will promote business investment opportunities. 

Addressing symptoms, not the cause 

Imagine a scenario a where an application is newly migrated to the AWS cloud following the principles of a well-architected framework. However, in operation you observe that at peak the application cannot scale-up quickly enough to support business workloads. This scenario and others like it are quite common.  

The above scenario is based on a real-world example of a website that provides search and ordering capability for an online retailer based in the UK. Marketing promotions resulted in very high transient scale-up peaks placing exceptional demand on cloud services. Service stability became compromised as the cloud native mechanisms for autoscaling proved inadequate. To overcome this, tactical solutions – such as oversized cloud capacity, reverting to manual scale-up, and developing engineering measures – were implemented to assure performance instead of identifying and fixing root causes.  

Despite these tactical measures, the website continued to experience service performance and scale-up problems. The communication with business teams was poor and scale-up events were not effectively anticipated.  

Capacitas was able to help this customer by providing a three-point solution to tackle the challenges set-out: 

1. Implementing ongoing performance engineering as part of an agile Sprint process the client was able to achieve increased scalability and stability. These improvements were proactively planned and achieved before the onset of peak sales periods. 
2. Implementing comprehensive observability of the application solution and the key third-party dependencies. This provided the client with the capability to anticipate and intercept performance variations before they became issues. 
3. With increased confidence in the application the client could reduce capacity and hence costs. 

A programme of cloud cost optimisation will undoubtedly allow companies to save large amounts of money. This creates obvious business advantages: 

• Money saved can be reinvested in new cloud architectures that provide strategic advantages and flexibility for growth. 

• Product and feature development can be accelerated. 

• Improved scalability that allows solutions to rapidly adapt to new market conditions. 

• Provides funds for reinvesting in the development of cloud skills that enable companies to leverage the wide portfolio of services that cloud typically offers, and also establish a bedrock or knowledge on maturing cloud processes such as DevOps. 

• As cloud costs optimisation is a data and information led programme it is likely that new insights about the way the business is operating will be forthcoming. Therefore, strategic decision making will be more comprehensively supported. 

• Development processes such as build, test, deploy, and monitor will more closely align to the need for adaptability and agility. 

Conclusion  

Optimising your cloud costs isn’t easy. But it’s not an impossible task either. Knowing exactly what you’re spending and why you’re spending it is just the first step in identifying opportunities for saving and implementing a long-term cost optimisation programme that will yield sustainable benefits.  

To sum it up, if you’re considering cloud cost optimisation, think about: 

• Effective cloud cost management leads to better financial planning and predictability, which is essential for long-term strategic planning.  

• Unblocking and fixing service issues not only unblocks service performance, stability, and scalability but also reduces cloud costs. 

• Aligning innovation and cost optimisation will result in better strategic decision making, flexible and scalable cloud solutions, accelerated product development, slicker development processes, and greater adaptability to different market conditions. 
  
  

To find out more about our approach to cloud cost optimisation, or to take a deeper dive into how to make it work for your organisation, download our latest whitepaper.