Cloud Buying Guide: Infra Optimisation

Buying cloud is, on the surface, very similar than fine tuning IT purchasing to outsourcing deals, but also very different.

We have been fine tuning our IT purchasing over the past decade to outsourcing deals. Buying cloud is, on the surface, very similar, but also very different when you take a deep dive into it.

In outsourcing deals, your aim is to lower the cost per VM and include as many services and responsibilities as possible in that price. In cloud, prices and services are fixed and there is little room for negotiation. But cost per VM is just the starting point for understanding if you save or lose money in cloud. Optimising the TCO in cloud is very different from optimising an on-prem or outsourcing deal.

Here Are A Few Things To Think About

Commitment –You cannot compare 5 years of on-prem TCO with cloud on-demand prices. In cloud, the cost difference between on-demand prices and 1-year commitment (Reserved Instances as an example) can be over 50%. This will significantly reduce your costs, but do not expect to have 100% of your consumption under RIs. Three year RIs are also not usually optimal because the on-demand prices will lower every year, so optimal RI usage needs careful analysing and planning.

Right instance type – On the other end of the spectrum from RIs, you have spot and billed by second instances. Spot instances are a very cost-efficient way to execute workloads like most batch and big data queries. The downside is that you can lose spot instances with a minutes warning. You, therefore, need a mechanism to stop and continue work. With a bit of overallocation, you can run enterprise workloads without risk and with even lower cost than with RIs.

License cost saving -There are two ways to reduce your software license costs in cloud. You can convert most of your commercial licenses to free versions in the cloud but that requires heavier migration and the business case would need to be calculated.

Cloud architecture can also enable other types of license reduction. Consider your typical mission critical Active-Active + DR setup. You have 3 licenses and usually, the most expensive license type which allows clustering. In cloud, you can run a second site both as a mirror site and a DR site, reducing your license cost by 30-50%.

Operation savings – cloud is, by default, software-defined infrastructure. This means all changes can be done quickly and enables them to be highly automated. Changes that take hours or days in traditional infra take seconds in the cloud. All this mean dramatically reduced operations cost (and increased speed).

Gain control of your daily spend with a tool that gives you instant value. We have built Klarity Core to give you a good starting point for controlling your cloud costs and activities. Klarity Core is the cloud management tool you need but didn’t think existed. The user-friendly dashboards and automation capabilities give you full control of your cloud estates and costs across Microsoft Azure, AWS, Google Cloud Platform and on-prem VMware. Find more info about Klarity here – or ping us for an one to one demo-session:

Price reductions – all cloud vendors lower their prices on a constant basis. While there is no guarantee if that will continue to happen in the future and how much the prices are lowered, history will give a good indication. You need to calculate a 3-5 year average cost and compare that to the fixed cost on-prem solution.

Most organisations are used to looking at a per VM, per month cost. This is only the starting point for your cloud TCO, but understanding cloud TCO is an important skill for anybody making infra decisions. Nordcloud can help you understand more about TCO and instances with an in-depth meeting from one of our cloud experts, contact us here.

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    The True Cost Of Private Cloud

    In public cloud you only pay for consumption, not for development, maintenance etc. The private cloud costs start to stack up over time.

    I love cloud, so any step towards it I personally see as being truly great. But all choices have consequences and with this article, I want to highlight those of moving to private cloud.

    A private cloud solution vendor can easily show you a calculation showing how much more cost efficient it is compared to public cloud, and of course, there are scenarios where that is true. If you have a set of applications that only require specific infrastructure services, the life cycle of those apps is known and predictable and your growth is also known and predictable. Ultimately, an Onprem Hyper Conversed solution with some private cloud features is probably cheaper, at least for a period of time.

    However, The Private Cloud Costs Start To Stack Up Over Time…

    Who does the R&D to maintain your private cloud stack (the software functionality to automate your infrastructure)? Take OpenStack, VMware stack, or any other way to build the needed cloud functionality. You can have over 20 software components each that have their own life cycle, and any update needs to be tested against all other components. Vendors are addressing this by packaging the components and doing the testing for you, but then you are tied to their cycles and version choices.

    What does it cost to build additional services beyond basic IaaS features? Continuous delivery pipeline features which integrate your favourite tool to your private cloud, automated provisioning of entire servers including database and app servers, PaaS features, machine learning features, and these are just the bare minimum.

    Lifecycle Costs

    There are of course, the costs of planning capacity and maintaining needed as a buffer for growth. But a far bigger cost is the tech refresh cycle with much needed migrations and forced upgrades. Let’s assume you have a 4 year refresh cycle. Year 3 and 4 capacity upgrades are ridiculously expensive. What if the private cloud had room for year 5 growth? How much does the maintenance extension cost for year 5? The list goes on, but I still have never seen calculations considering these unpleasant surprises which are, in most cases, inevitable (who knows how much capacity we would need in 4 years!)

    Multiple Cloud Costs

    There is no single cloud stack (hardware and software) that covers all your needs. The requirements of basic VM IaaS to SAP S4 Hana to Machine Learning are very different on all levels. As a basic example, ML requires GPUs, SAP requires a huge amount of memory etc. There is no practical way to deliver that from one cloud, so be prepared to build and manage multiple private clouds.

    Consider all the costs of maintaining and developing your private cloud. Then consider the situation 4 years from now and the money you could potentially spend on that. Wouldn’t you have been better off spending that money modernising your applications and creating new digital innovation for your business and customers?

    The cost of these in public cloud? You only pay for consumption, not for development, maintenance etc. The list goes on… Read more on public cloud cost clarity and optimisation in our blog post here

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    Get in Touch

    Let’s discuss how we can help with your cloud journey. Our experts are standing by to talk about your migration, modernisation, development and skills challenges.








      The true cost of private cloud

      CATEGORIES

      Blog

      I love cloud, so any step towards it I personally see as being truly great. But all choices have consequences and with this article, I want to highlight those of moving to private cloud.

      A private cloud solution vendor can easily show you a calculation showing how much more cost efficient it is compared to public cloud, and of course, there are scenarios where that is true. If you have a set of applications that only require specific infrastructure services, the life cycle of those apps is known and predictable and your growth is also known and predictable. Ultimately, an Onprem Hyper Conversed solution with some private cloud features is probably cheaper, at least for a period of time.

      However, the private cloud costs start to stack up over time…

      Who does the R&D to maintain your private cloud stack (the software functionality to automate your infrastructure)? Take OpenStack, VMware stack, or any other way to build the needed cloud functionality. You can have over 20 software components each that have their own life cycle, and any update needs to be tested against all other components. Vendors are addressing this by packaging the components and doing the testing for you, but then you are tied to their cycles and version choices.

      What does it cost to build additional services beyond basic IaaS features? Continuous delivery pipeline features which integrate your favourite tool to your private cloud, automated provisioning of entire servers including database and app servers, PaaS features, machine learning features, and these are just the bare minimum.

      Lifecycle costs

      There are of course, the costs of planning capacity and maintaining needed as a buffer for growth. But a far bigger cost is the tech refresh cycle with much needed migrations and forced upgrades. Let’s assume you have a 4 year refresh cycle. Year 3 and 4 capacity upgrades are ridiculously expensive. What if the private cloud had room for year 5 growth? How much does the maintenance extension cost for year 5? The list goes on, but I still have never seen calculations considering these unpleasant surprises which are, in most cases, inevitable (who knows how much capacity we would need in 4 years!)

      Multiple cloud costs

      There is no single cloud stack (hardware and software) that covers all your needs. The requirements of basic VM IaaS to SAP S4 Hana to Machine Learning are very different on all levels. As a basic example, ML requires GPUs, SAP requires a huge amount of memory etc. There is no practical way to deliver that from one cloud, so be prepared to build and manage multiple private clouds.

      Consider all the costs of maintaining and developing your private cloud. Then consider the situation 4 years from now and the money you could potentially spend on that. Wouldn’t you have been better off spending that money modernising your applications and creating new digital innovation for your business and customers?

      The cost of these in public cloud? You only pay for consumption, not for development, maintenance etc. The list goes on… Read more on public cloud cost clarity and optimisation in our blog post here

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        Cloud buying guide: infra optimisation

        CATEGORIES

        Blog

        We have been fine tuning our IT purchasing over the past decade to outsourcing deals. Buying cloud is, on the surface, very similar, but also very different when you take a deep dive into it.

        In outsourcing deals, your aim is to lower the cost per VM and include as many services and responsibilities as possible in that price. In cloud, prices and services are fixed and there is little room for negotiation. But cost per VM is just the starting point for understanding if you save or lose money in cloud. Optimising the TCO in cloud is very different from optimising an on-prem or outsourcing deal.

        Here are a few things to think about…

        Commitment –You cannot compare 5 years of on-prem TCO with cloud on-demand prices. In cloud, the cost difference between on-demand prices and 1-year commitment (Reserved Instances as an example) can be over 50%. This will significantly reduce your costs, but do not expect to have 100% of your consumption under RIs. Three year RIs are also not usually optimal because the on-demand prices will lower every year, so optimal RI usage needs careful analysing and planning.

        Right instance type – On the other end of the spectrum from RIs, you have spot and billed by second instances. Spot instances are a very cost-efficient way to execute workloads like most batch and big data queries. The downside is that you can lose spot instances with a minutes warning. You, therefore, need a mechanism to stop and continue work. With a bit of overallocation, you can run enterprise workloads without risk and with even lower cost than with RIs.

        License cost saving -There are two ways to reduce your software license costs in cloud. You can convert most of your commercial licenses to free versions in the cloud but that requires heavier migration and the business case would need to be calculated.

        Cloud architecture can also enable other types of license reduction. Consider your typical mission critical Active-Active + DR setup. You have 3 licenses and usually, the most expensive license type which allows clustering. In cloud, you can run a second site both as a mirror site and a DR site, reducing your license cost by 30-50%.

        Operation savings – cloud is, by default, software-defined infrastructure. This means all changes can be done quickly and enables them to be highly automated. Changes that take hours or days in traditional infra take seconds in the cloud. All this mean dramatically reduced operations cost (and increased speed).

        Price reductions – all cloud vendors lower their prices on a constant basis. While there is no guarantee if that will continue to happen in the future and how much the prices are lowered, history will give a good indication. You need to calculate a 3-5 year average cost and compare that to the fixed cost on-prem solution.

        Most organisations are used to looking at a per VM, per month cost. This is only the starting point for your cloud TCO, but understanding cloud TCO is an important skill for anybody making infra decisions. Nordcloud can help you understand more about TCO and instances with an in-depth meeting from one of our cloud experts, contact us here.

        Blog

        Starter for 10: Meet Jonna Iljin, Nordcloud’s Head of Design

        When people start working with Nordcloud, they generally comment on 2 things. First, how friendly and knowledgeable everyone is. Second,...

        Blog

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        UX writers are not omniscient, and it’s best for them to resist the temptation to work in isolation, just as...

        Blog

        Building better SaaS products with UX Writing (Part 2)

        The main purpose of UX writing is to ensure that the people who use any software have a positive experience.

        Get in Touch

        Let’s discuss how we can help with your cloud journey. Our experts are standing by to talk about your migration, modernisation, development and skills challenges.