07 Mar The Impact of Optimization in a Cloud Architecture
In recent years, few aspects of modern life have enterprises and techies drooling more than the cloud. The amount of cloud of data centers dominated by tech giants, Amazon, Microsoft, Google and Oracle is stagering and it is not stopping any time soon. During the Covid-19 pandemic, they have helped transform people’s lives, supporting a change in the way we work (from home), and even how we consume and purchase content like films – both at home and at Cinemas.
Cloud Computing grew exponentially during these tumultuous years with no end in sight. What companies will need to think about in the years to come is how much control do they have over their costs? We also need to start thinking about how much value can be gained through Cloud optimization — whether through system design and implementation, cloud architecture, governance, and automation tools.
In a blog post by Calvin French-Owen on The $10m engineering problem, he mentions that “In the age of the cloud, we’ve entered a new reality. Your costs might grow by 10x overnight as a result of a sudden increase in volume or a one-line config change.” This statement makes a case that every improvement made to your cloud architecture, it can improve your gross margin, therefore it can drive up the value of the company.
This post is meant to dimensionalize the cost of Cloud, and help us all understand the magnitude of potential savings from optimization.
I have a client in the Healthcare Insurance Industry that implemented an Oracle ExaCC as their main architecture in late 2020, and right from the implementation they had set their OCPUs to a “fixed” value and barely modified them from time to time.
The average monthly spend that they had on this architecture was $37,400 CAD which is an approximate $448,800 CAD OpEx spend for 1 year rounding up to a $2,244,000 CAD OpEx spend for 5 years.
This client asked how could they reduce this spend? After working with them we implemented a script to help them scale up/scale down their OCPUs to meet the workload that they were experiencing. As soon as the script was implemented, their monthly spend reduced to $18,111 CAD which is estimated to be approximately a $217,332 CAD OpEx spend for 1 year or a $1,086,660 OpEx spend for 5 years.
THIS IS A 5 YEAR SAVINGS OF WELL OVER $1M.
Companies across the industry need to start looking at Cloud cost metrics alongside core performance and reliability metrics earlier in the lifecycle of their business, and this is a small example of why.
Companies also need to enable Engineers, and not just finance teams, to take ownership of Cloud spend by fomenting the use of governance and automation tools.
Should you need any help in this journey, feel free to reach out.