As more and more companies are migrating to the cloud, one issue that is often overlooked is cloud cost optimization. While many organizations correctly identify different areas for cost savings, implementing such savings presents an important challenge within cloud operation. Moreover, many companies lack trustworthy insight into their cloud environment, leading to a lack of accurate identification of expenditure and, more precisely, uncertainty about which department drives costs upwards.
The current State of FinOps 2022 report demonstrates that most companies struggle with cloud cost optimization and implementing a FinOps attitude. 30% of participants in the survey have reported that they struggle to convince engineers to take action on cloud cost optimization. And here’s the thing: effective FinOps methodologies enable everyone in an organization to speak the same language, not just about cloud but about cloud spending.
In the survey, 29% of participants admitted they struggle with forecasting their spending. Concerns about organizational culture and resource waste were prominent among all participants in the survey, and with our customer, it was no different.
Witness how we reduced a client’s cloud bill by $1.5 Million annually, and improved its scaling – in our latest FinOps case study.
Our client, a giant eCommerce group, has gradually migrated its operation to the cloud. However, the transformation was held without any methodology or proper architectural preplanning. As a result, the client faced an unproportionate cloud bill and minimal insight into the usage and spending on resources.
For example, the client’s 16 verticals were all managed as separate business units, with overall 74 AWS accounts and no centralized optimization practices or one entity governing the general cost operation.
Moreover, as the organization lacked a FinOps culture, engineers would utilize only 5% of CPUs in some cases due to their tendency to increase machine size when an application underperformed, rather than investigating the issue and trying to optimize performance and costs.
While their costs kept mounting, the group addressed their cloud consultancy firm to provide a cost-reduction solution. However, as the firm specializes in cloud transformation, they referred the client to GlobalDots, to come and assist the client with its cutting-edge FinOps methodologies and tools.
Through excessive monitoring of Cloud costs and after interviewing several key officials in the company, GlobalDots has managed to map the main costs and identify multiple savings opportunities. For example, GlobalDots spotted significant potential cost savings on EC2 services, ElasticSearch, NAT gateway, and AWS Premium Support.
GlobalDots proposed savings of $1.5 Million annually, based on short-term and long-term savings, generating some quick wins with sustainable cost optimization. GlobalDots offer included not only cost optimization solutions but an end-to-end service for the company:
- 24/7/365 help desk support.
- Establishing a personal dashboard for resource owners to track costs and create accountability.
- Weekly calls and update meetings.
- Monthly reporting on behalf of GlobalDots, presenting the periodic achievements to the client’s management, infrastructure, and finance teams, leading to greater shared responsibility on cloud cost management.
Cloud costs optimization – challenges and remedies
As we know, per our experience, expenditure identification is the easy part. The main challenge is implementing an effective cloud cost optimization, and this case was no different.
With 74 AWS accounts spread over 16 business units, the optimization process was relatively long and complex. We did experience some quick-win savings in the first month, but it took some time to see actual results that impacted the entire operation. Moreover, as it is a giant eCommerce organization, you can be sure that not all employees embraced the idea of external intervention and inspection from day one. As such, one of the main challenges was to build trust and generate fruitful cooperation with different business units, allowing for the smooth implementation of FinOps solutions.
Eventually, the primary cost savings resulted from numerous vital actions that had a direct impact:
- Purchasing reservations and doubling the number of machines that run on a reservation plan.
- Implementing GlobalDots’ dashboards to detect anomalies in spend spikes due to misconfiguration, database overuse, keeping old inactive resources, etc.
- Manual Right Sizing VMs to remove unnecessary paid-for-resources.
- Resource cleanup and data transfer, consolidating and upgrading tables and machines, and so reducing storage and operation costs.
Benefits and Impact of GlobalDots Solutions
With these solutions implemented, the client’s cloud bill decreased by 20%, and the client grew by 30% during the project due to increased website traffic and feature development.
The client could continue scaling, backed by a solid cloud strategy and significant impact monthly:
- $250K savings in the first 4 months
- 16% reduction in monthly bill
- ~50% reduction in ElastiCache costs
- Implementation of FinOps best practices and sustainable growth.
Cloud operation without strategic cost optimization is undoubtedly leading to waste, potentially jeopardizing business growth plans. Therefore, a successful and comprehensive cost reduction project must be executed by FinOps specialists to ensure accurate planning and implementation.
In this case, the client approached GlobalDots to implement its innovative FinOps tools and mindset. Like many projects in the field, this one too took several months, followed by ongoing monitoring. Such human intervention is irreplaceable, eventually helping this giant eCommerce provider save significant money while growing and maintaining a sustainable and effective cloud strategy.