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Cloud Operational Expenditure Index for your AWS Cloud Operations

1. How do you use AWS as a solution to your infrastructure requirements?





2. What is your approximate spend on AWS per month (cumulative of all accounts)?





3. Which of the below services are most dependent / spending at least one-fourth of the cost?






4. Are you able to effectively track the cost & usage of your account(s) to its most granular level?






5. How is your AWS quarterly cost trending over the last one year?





6.What is the composition of spots & reserved instances in meeting your computing demand?





7. Which of the following you have implemented to reduce cost?






8. Have you created your continuous cost optimization process to keep a check on infrastructure spends?





Cloud Cost Optimization Index for your AWS Cloud Operations is

Your Level

Score 0-2.5

Level 1

Your cost optimization index score states that there is a lot of scopes to transform your current cloud operations to achieve higher process efficiency and better cost optimization.

Your Level

Score 2.5-4

Level 2

Your organization seems to have taken the right step towards cloud optimization but continuing in the right direction is key for long term success.

Your Level

Score 4-5

Level 3

Your optimization methods are matured and you have almost all the current best practices in process and technology going for you. We would recommend keeping updated by being in touch with our evolving adoption of the latest technologies and process improvements

Assessment Responses

To dig a little deeper, you can see your responses along with the attributes that need to be focused to level up your AWS environment.

Question 1

Question

How do you use AWS as a solution to your infrastructure requirements?

Your Response

Level Up

Though the need for accounts are based on the strategic business requirements, the general rule of thumb is,

  • Single Account is easy to set up, maintain, and track utilization. Resource exhaustion due to hard limits needs to be addressed & additional security measures should be in place for data protection at rest & transit.
  • Multi-Account improves security, infrastructure management & efficient resource utilization.
  • Single Account Hybrid (with On-prem Infrastructure) is comparatively complex to deploy & manage the infrastructure. It provides better security with in-house datastore. Though it needs upfront investment but provides fall back due to less reliance on the cloud. Needs a separate infrastructure team to manage the on-prem Datacenter.
  • Multi-Account Hybrid (with On-prem Infrastructure) is highly complex to set up & manage infrastructure and involves a lot of effort in planning, budgeting & forecasting to ensure an optimized infrastructure. It allows us to implement high-security standards & have greater control over data and provides maximum resource availability at our disposal. Needs a lot of upfront investment in infrastructure provisioning & management, overshadowing the benefits of cloud adoption.

Question 2

Question

What is your approximate spend on AWS per month (cumulative of all accounts)?

Your Response

Level Up

Spend is a subjective factor, a small organization might feel 50k/month is high and the same feeling can exist in a large organization BU’s budget discussion. As organization grows, the infrastructure requirements will increase, hence planning & budgeting your cloud investments is crucial. In general, you should consider below before planning,

  • AWS Free Tier to test services & resource requirements
  • Identify the right investment type (upfront / on-demand)
  • Check & avail the various “Credit” eligible services & promotional Offers
  • Opportunities to optimize cost by monitoring, identifying resources that are unused and/or underutilized

If you are on the higher side of spending (let us say above $ 50k), then apart from the above there are a lot of opportunities with volume discounts, be it single/multi AWS accounts. There are certain services where “Use more to pay less” applies e.g., Simple Storage Service (S3).

Question 3

Question

Which of the below services are most dependent / spending at least one-fourth of the cost?

Your Response

Level Up

These are the list of essential services that almost every infrastructure depends on and holds the key to optimize cost for a successful digital transformation. The services seem to work in a silo, but in most of the cases, they are dependent on other services (like data transfer) directly / in-directly & does involve cost factors that cannot be overlooked.

  • Compute services include EC2 (Elastic Compute Cloud) & related services like ELB (Elastic Load Balancers), EIP (Elastic IP), Networking (VPC, network I/O), etc., and the services indirectly require the compute capacity like EMR (Elastic Map Reduce), ECS (Elastic Container Services), etc.
  • Storage service like S3 (all storage classes) plays a vital role along with services that depend on data storage like Cloud front, network I/O, etc.
  • Database & Big data services are not only to store data but used predominantly for moving the data around based on different latency requirements, producing critical reports (both internal & customer-facing) which need to be monitored to ensure that they are highly available yet cost-efficient.
  • In today’s microservices world, network i/o plays the nerve of all the systems interacting with each other to create one large application to serve your business needs.

Question 4

Question

Are you able to effectively track the cost & usage of your account(s) to its most granular level?

Your Response

Level Up

Cost optimization strategy varies with the organization's goals. Four major pillars of a successful optimization process are,

  • Organize – Formulate a unique resource tagging strategy (categorizing based on department, application, environment, etc.,) using AWS native solution to organize, cost allocate & track spend (both free tier & payable tiers).
  • Report – Create custom reports (and dashboards) by gathering organized data, analyze them frequently to create accountable and transparent cloud spend. Also, historical data helps us keep track of the spending against financial goals.
  • Alert – Set up billing auto-alerts & notifications (with right threshold) based on the spend limits to take necessary action and to avoid overspending.
  • Audit – A regular cloud check helps to level up your cost optimization strategy by identifying scaling policies, unused & underutilized resources, and to ensure compliance.

Question 5

Question

How is your AWS quarterly cost trending over the last one year?

Your Response

Level Up

It is important to understand how your infrastructure scales, spend varies in proportion to your business goals & the planned budget.

  • If you are not tracking the cloud spend, then it is high time you start doing it. (According to Gartner, most businesses are estimated to overspend in the cloud — by up to 70%.)
  • Whereas, a change (an increase or decrease) in cloud spend can either mean overspending or overall performance degradation (maybe overlooked), unless the change is an outcome of a well scrutinized & implemented process to optimize cost.
  • Even with the spend being stable without much of a fluctuation, conducting a thorough audit, analyzing the historical data (bare minimum of past 12 weeks) is important to be on top of the cloud spend.

Question 6

Question

What is the composition of spots & reserved instances in meeting your computing demand?

Your Response

Level Up

Compute is one of the most used resources in the cloud. By categorizing the compute workload (as persistent / non-persistent) & sizing analysis helps to choose the right instance type. Though the composition of Reserved Instances (RI) & Spot instances varies depending on your business requirements, it is possible to gain maximum benefit by the right choices. By rightsizing & choosing reserved instances (RIs) one can save up to 75% of the compute cost.

  • If you have less than ~25% of reserved & spot instances, then you may need to better analyze the workload requirements and take advantage of RI’s cost benefits.
  • If you were able to meet more than 25% of your computing demands with the Reserved & Spot market, then you are on the right track.

Question 7

Question

Which of the following you have implemented to reduce cost?

Your Response

Level Up

The list provides some of the key attributes to reduce costs. If you have implemented most of them as per your infrastructure needs & continuously tracking the spend, then you should have noticed a significant cost reduction. To further detail,

  • Storage has various classes, hence based on data retention needs, implementing the lifecycle rules to move the data from highly reliable storage to archives (as needed), before evicting it out of the system once they are void.
  • Right-Sizing helps to avoid underutilization, especially when you migrate to the cloud, there are possibilities that the sizing may be overlooked. Right-sizing & choosing the best fit to maximize cost benefits.
  • There are many options available when it comes to Databases (including relational, key-value, document, in-memory, graph databases, etc.,). But the right choice is always based on the latency requirements, the purpose of your application while having a highly available & fault tolerance system in place. Resources like this help to make a suitable choice that fits your business needs.
  • Auto-scaling groups when effectively architected with rightsizing and scaling policies yields cost savings while ensuring happy customers by rendering high-performance application(s).

Question 8

Question

Have you created your continuous cost optimization process to keep a check on infrastructure spends?

Your Response

Level Up

If your cost savings or optimization process is in pieces then the benefits you see could be overshadowing a deeper infrastructure concern and might lead to bigger challenges down the line. Cost optimization is more about discipline than just a process and hence continuous improvement will not only help to save cost but to maximize business value. This is one of the key aspects of iOPEX whereby enabling continuous optimization to help our customers gain exponential benefits throughout their partnership with us.

Find out how iOPEX helped a leading US based Digital Ad Marketing company reduce their AWS expenses by 22%

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To know how iOPEX can help you for AWS Cost Optimization Services, write to us at solutions@iopex.com