Cloud optimization – too good to be true?

Increasingly in this geopolitical and socio-economic climate, companies are finding they need more in terms of cloud space and performance. But more cloud space and performance also comes with an unhealthy slab of expense that can kill an otherwise healthy bottom line stone dead. In this kind of cloud-based profit-pinch, more and more companies are turning to cloud optimization as a way of getting their needs met, not necessarily by blanket expansion of their cloud stake, but by using specialized companies that can tailor their cloud expenditure as needed.

We sat down with Kris Bliesner, CEO of Vega Cloud, which provides such cloud optimization services and which promises a guaranteed 10% cost reduction, to try and demystify this dark art.

THQ:

Saving companies money while maintaining service and safety levels is always going to initially sound like a con. What’s the explanation? How do you fit this square peg (maintained service levels) into that round hole (a guaranteed 10% cost reduction)? Where do the savings come from in this equation?

KB:

There’s no “dark art” at work here. The fact is that public cloud infrastructure is easy enough that plenty of businesses do it for themselves. But then they find they struggle to maintain control around their cloud-spend. The reason for that is usually because the cloud environments they’ve deployed are unoptimized.

THQ:

So they effectively buy something like a shirt that’s three sizes too big – it absolutely covers their needs, but it’s not tailored to those needs – and then they find themselves paying for yards of material they didn’t actually have any use for?

KB:

Something like that, yeah. C;oud optimization provides the nips and tucks that the company’s not particularly qualified to identify, because that’s not what it specializes in. Optimizers do specialize in that field, and so can identify the optimizations that can be safely made, cutting costs, while keeping all the cloud functionality the company actually needs.

THQ:

Part tailor, part accountant, all money-saving machine?

KB:

Yeah. We provide the software that identifies where these unoptimized elements are, but we also provide the automation to drive the remediation as well – all within existing service levels and contracts.

The nuts and bolts.

THQ:

OK, so how does cloud optimization work in practice?

Well, each company will have its own way. At Vega, we follow the FinOps Foundation’s three phases: Inform, Optimize and Operate:

With Inform, it’s exactly what it says it is – an information spree. We get companies the answers to the fundamental questions they need to ask before they can begin to properly optimize their cloud environment and reduce their cloud-spend.

There’s one key question – who’s spending what for which services? But we apply the question across the whole business – business units, application teams, different cloud providers, etc. The Inform phase is where companies dial in their cost structure to allow for things like cost allocation, chargebacks, showbacks, etc.

Optimize is our recommendation engine. It runs in the background, looking at all the data we take in during the Inform stage, and comes up with optimization recommendations across several different categories, such as financial, waste elimination, utilization, etc. These recommendations are built using curated data, to make sure we don’t lose the business context of the recommendation, and so the optimizations make sense based on that curated data.

And finally, the Operate phase lets end users automatically implement a recommendation. The users decide which recommendations to approve, when to implement them, and how they want exceptions processed, so it’s – to use your word – tailored pretty precisely to their actual needs.

THQ:

So in a sense, it’s a kind of data-driven, automated, client-tailored, cloud-spend version of a hard drive defragmentation? This is the situation as it exists, automatically find me the best optimizations, let me nip and tuck them around the specifics of my business needs and boom! Make it so?

KB:

Pretty much exactly that, yes.

Show me the money!

THQ:

OK, so talk us through this part – what’s in it for you? What’s in it for the cloud optimization companies, providing the software and saving companies money on their cloud bills – how do you make money?

KB:
Oh, there are two main options – at least, two that we use. Either we can license our technology for a flat fee, or, depending on what works best for our customers, we can use a shared savings model. That’s kind of like a “no win no fee” agreement – we invoice the customer for a small percentage of the amount of money they save as a result of their cloud optimization using our platform.

THQ:

Right, but you talk about offering a “risk-free” way of saving companies money. Most businesspeople feel a shudder go down their spine and start looking for loopholes when they hear that. How are you claiming to remove the risk from a standard business relationship?

KB:

Ah, but it isn’t a standard business relationship, is it? The shared savings model means we only get paid once our customers have saved money on their cloud bill. The ROI is built in, and it’s a small percentage, so customers get to realize the majority of their savings for other things, like increased investment in other areas, or simply to lower their costs associated with cloud infrastructure, given the rising costs of almost everything you need to run a cloud-based business these days.

There are no agents to install, and our Inform and Optimize SKUs only need read-only access, so there’s no risk to your environment from a tech perspective either.

It’s not like you’re going to decide on cloud optimization and wake up one morning with a gaping hole in your business cloud.

Free your cloud, and the rest will follow.

THQ:

That would certainly stretch the ide of “cloud optimization” to somewhere past breaking point. So. without turning this into a sales pitch, it makes sense for companies to save money on their cloud-spend wherever possible, but is there any other benefit to cloud optimization?

KB:

Sure. Cloud optimization helps unlock the elastic nature of public cloud. We have a scheduling engine, so for instance, if you have particularly heavy workloads, optimization makes it easy to schedule them in such a way that you can take advantage of hourly pricing models for compute.

Also, by helping to organize your cloud resources in the way you think about your business, cloud optimization can get businesses closer to their demand curve for infrastructure. That can be big, especially if you’re used to being forced to organize your resources in the way your provider wants you to. It frees you up to have a cloud infrastructure that mirrors the way you think about the business – which means easier use and navigation according to the parameters of your business.

The thing is, public cloud should absolutely be less expensive than on-premises infrastructure. But in the real world – and particularly in uncertain economic times – actually achieving that takes constant work and optimization.

THQ:

The cloud equivalent of emptying the recycling bin and re-organizing the file structure every morning before you can get down to business.

KB:

Exactly. Cloud optimization services like ours use automation running in the background to unlock the optimizations that businesses need to save money on their cloud-spend – and let the businesses do what they do best.

That’s the thing – many businesses think they’re doing a great job at optimization, but it’s rarely their core competency. If it were, they’d be in our business, rather than their business.

That means there are usually a whole host of ways that we can find to heighten their optimization, free up their flexibility and save them cloud-spend money which they can use elsewhere. On average, that amounts to savings of around 22% of their total cloud-spend.

THQ:

Cloud optimization, then – not too good to be true after all. Just good enough.