Industry analyst at Gartner. Global technology influencer, thought leader, strategist, author, trusted advisor and speaker. Thriving on #cloudcomputing, #cloudeconomics and #cloudmanagement. Based in Europe. Photographer. Guitarist. Singer. Beagle owner.
I am proud to announce that my research on cloud cost management and optimization is now available for free at this link. Gartner made this research public to help organizations in this difficult moment of dealing with a global pandemic and economic recession. The research was selected because it speaks to pandemic-driven business priorities such as cloud adoption and cost optimization.
Gartner has been publishing guidance on managing costs of cloud IaaS and PaaS for the last few years. This practice continues to evolve due to new cloud provider capabilities, organizations increasing their cloud maturity and cloud services becoming more complex. Earlier this year, my colleague Traverse Clayton and I published the latest edition of our cost management framework (depicted in the figure below). This update has drawn a lot of interest from clients, because it helps organizations accelerating cloud adoption in a governed fashion, while unlocking cost savings and minimizing the risk of overspending.
The framework describes the technical capabilities that organizations must develop to manage cloud costs successfully. Our guidance has evolved to encompass new aspects of planning, tracking and optimizing public cloud costs on an ongoing basis. Examples of updates included in this edition are:
A clearer delineation between “Reduce” and “Optimize.” Reducing costs is about leveraging more cost-effective configurations without impacting the application architecture. These techniques include rightsizing, scheduling and programmatic discounts. Optimizing costs requires implementing architectural changes that drive costs down. For example, moving from compute instances to event-driven serverless function-as-a-service.
The addition of techniques to incentivize financial responsibility. Centralized IT does not want to be held accountable for the spend generated by architectural decisions made by other teams, such as application development and DevOps. Therefore, the framework includes more aspects that help “shift left” the budget accountability. These techniques include budget approvals, dedicated dashboards, cost optimization recommendations and the institution of “leader boards” that highlight the most disciplined cloud consumers.
The addition of the correlation of cloud costs with business value. Many digital business applications do not have steady budgets. Their cost often varies on the basis of the number of transactions or users that they handle. The framework helps identify business KPIs and calculate their ratio with cloud costs. Monitoring the trends of that ratio allows organizations to manage costs of applications that have variable demand, in relation to the value that organizations receive from cloud services. Furthermore, such approach allows for the measurement of the efficiency of the cloud cost management practice.
Read the complete cloud cost management and optimization research for free at this link. I hope you find it useful and I welcome your feedback at email@example.com. Should you also be a Gartner client wanting to discuss this topic in more details, you can schedule an inquiry call with me by emailing firstname.lastname@example.org or through your Gartner representative.
Follow me on Twitter (@meinardi) or connect with me on LinkedIn for further updates on my research. Looking forward to talking to you!
If you’re using public cloud infrastructure and platform services, I bet that you’ve been thinking about adopting a tool to cut down costs. You’ve been told that there is some inherent waste in your cloud spending and you want to address that. I’m also sure that a number of vendors told you that they can help with that. But to what extent? If cost management and optimization are becoming “table stakes” in the cloud management market, there can be a huge difference in the capabilities of each available solution. Some solutions may just scratch the surface and simply report for underutilized instances – when CPU have been low in usage in the last week or so. But these solutions will leave it up to you to figure out the rest. Other solutions may automatically execute precise instance rightsizing across types, families and regions, using AI-based pattern recognition and ML inference.
Both cloud providers and third-party vendors have invested in developing cost optimization capabilities for public cloud services. In this complex scenario you may wonder: which tools will allow me to truly maximize savings while minimizing performance risks? The good news is that Gartner just published research to answer this exact question and it’s available on gartner.com right now.
My colleague Brian Adler and I have just published the following two research notes, both available behind paywall:
Solution Comparison for Public Cloud Third-Party Cost Optimization Tools: This note assesses the cost optimization capabilities provided by five third-party solutions, namely Apptio, CloudCheckr, Flexera, Turbonomic and VMware. This is not a comprehensive list of tools as there are many more tools that help with cloud cost optimization. These five vendors have been selected based on inquiry volume.
The notes provide a side-by-side comparison of each solution based on a common set of criteria. Examples of criteria include compute instance rightsizing, block storage rightsizing, unused resource decommissioning and reservation portfolio management. For each criterion, vendors have been scored with grades such as “Low”, “Medium” or “High”.
Gartner clients can use the two research notes to understand what you can do using cloud providers’ native tools and which gaps you can fill with third-party tools. Furthermore, clients can use the provided criteria to assess the capabilities of any other public cloud cost optimization tool that hasn’t been included in this research.
This research is part of a series of Solution Comparisons that we published to assess tools in various areas of the Gartner cloud management wheel. Read the full research notes if you want to know the results of this comparative assessment. You can also schedule an inquiry call (email@example.com) with myself or my colleague Brian Adler if you want to have private conversations about our research findings. In case you don’t have access to this research and you’d like to, I’m sure your Gartner representative will be more than happy to help.
Lastly, feel free to follow me on Twitter (@meinardi) or connect with me on LinkedIn for further updates on my research. Looking forward to talking to you!
Today, I am proud to announce that I just published new research (available here) on how to manage public IaaS and PaaS cloud costs on AWS and Microsoft Azure. The research illustrates a multicloud governance framework that organizations can use to successfully plan, track and optimize cloud spending on an ongoing basis. The note also provides a comprehensive list of cloud providers’ native tools that can be leveraged to implement each step of the framework.
In the last 12 months of client inquiries, I felt a remarkable enthusiasm for public cloud services. Every organization I talked to was at some stage of public cloud adoption. Almost nobody was asking me “if” they should adopt cloud services but only “how” and “how fast”. However, these conversations also showed that only few organizations had realized the cost implications of public cloud.
In the data center, organizations were often over-architecting their deployments in order to maximize the return-on-investment of their hardware platforms. These platforms were refreshed every three-to-five years and sized to serve the maximum expected workload demand over that time frame. The cloud reverses this paradigm and demands that organizations size their deployment much more precisely or they’ll quickly run into overspending.
Futhermore, cloud providers price lists, pricing models, discounts and billing mechanisms can be complex to manage even for mature cloud users. Understanding the most cost-effective option to run certain workloads is a management challenge that organizations are often unprepared to address.
Using this framework will help you take control of your public cloud costs. It will make your organization achieve operational excellence in cost management and realize many of the promised cost benefits of public cloud.
The Gartner’s framework for cost management comprises five main steps:
Plan: Create a forecast to set spending expectations.
Track: Observe your actual cloud spending and compare it with your budget to detect anomalies before they become a surprise.
Reduce: Quickly eliminate resources that waste cloud spending.
Optimize: Leverage the provider’s discount models and optimize your workload for cost.
Mature: Improve and expand your cost management processes on a continual basis.
If you recognize yourself in the above challenges, this new research note is an absolute recommended read. For a comprehensive description of the framework and the correspondent mapping of AWS and Microsoft Azure cost management tools, see “How To Manage Public Cloud Costs on AWS and Microsoft Azure”.