This guest blog comes to us from Cloudability, a featured member of the SoftLayer Technology Partners Marketplace. Cloudability is a cloud budget management service that helps companies manage their cloud spending, prevent overages, reduce waste and save money. In this video we talk to Cloudability Founder and CEO Mat Ellis about how the company developed, and we hear examples of how Cloudability is supporting and businesses money.
Tech Partners Marketplace: http://www.softlayer.com/marketplace/cloudability
5 Things You Need to Know to Control Variable Infrastructure Costs
If you have on premise equipment, then your costs are fixed — you paid your money and now you own a fixed amount of hardware and software. The cloud, on the other hand, has variable costs due to two important features — you only pay for the services you use and it's scalable, providing the resources you need at any given time. By using a cloud infrastructure, you end up with what we call Variable Infrastructure Costs (VICs).
Most of SoftLayer's services meet the criteria for a VIC. You need an extra cloud server for a few hours? No problem. More disk? Done.
With great power, comes great responsibility, and the biggest problem with VICs is that they are just like a faucet: Leave it running, and the water bill can add up fast ... Not to mention all that waste! Unless you keep a close eye on VICs, you could find yourself in front of your CFO, pleading for your budget's life.
Cloudability was created to keep those costs under control, and in the course of working with our customers, we've come up with a simple five-point checklist of best practices:
Make sure you have insight to all your costs, create a single contract database, and review it regularly. Don't forget to include total cloud spending alongside your fixed contracts. Talk to your finance department, then drill your employees and tech teams to make sure you REALLY know the whole truth. There can be — and usually is — a disconnect in the organization about how much cloud is really being used.
Get into the weeds to see why each project is spending what they are spending. Try to calculate some tangible metrics like cost per thousand web pages served or cost per new customer, and benchmark these against public data and common sense.
3. Organization and Rebalancing
Put each of your projects into one of four quadrants:
- High Spend/Low Efficiency
- High Spend/High Efficiency
- Low Spend/Low Efficiency
- Low Spend/High Efficiency.
Focus on the High Spend/Low Efficiency quadrant first. That's where you will find the easiest wins. Then, move onto the High Spend/High Efficiency quadrant where you'll find best practices to use for other projects. Then, if you have the time/resources, focus on the low spend projects and repeat.
Contact your colleagues outside your department and compare unit prices, especially for things like bandwidth, co-lo and staff costs. Make sure you're in the top quartile for value (i.e. lowest costs). Renegotiate with vendors if you aren't, and plan to change vendors and staff when you can't the best value with your current resources.
Understand your business objectives and get your roadmap tightly aligned. If you need some CAPEX to reduce operational expenses, then ask for it as part of the planning. You've got to spend money to make money right?
VICs can be easily manage once you understand where they're all coming from. After applying these five best practices into the way your business approaches cloud spending, you'll be well on your way. Cloudability's business was built to make the process a little easier and more automated for you, so if you want to use our tool to help you "cover your *aas," we'd love for you to try it out for free: https://app.cloudability.com/signup
-Mat Ellis, Cloudability
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