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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    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.

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      Microsoft Azure has launched two new sets of virtual machines

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      Last week, Microsoft Azure launched two new series of virtual machines, the D_v3 and the E_v3 which are follow-ups to the D_v2-Series. This launch introduces new sizes that use Hyper-Threading Technology (running on Intel Broadwell E5-2673 v4 2.3GHz processor, and the Intel® Haswell 2.4 GHz E5-2673 v3), shifting from physical cores to virtual CPU’s (vCPU). They will also be priced 28% lower than their predecessors.

      Microsoft says that this shift is an ‘important architectural change’ that will allow the company to support larger VM sizes, helping them to ‘unlock more power from underlying hardware’ and therefore deliver better performance, efficiency and cost-savings.

      The new virtual machines will be the first to run on Windows Server 2016 hosts. This enables Nested Virtualisation and Hyper- V containers for the new Dv3 and Ev3 sizes, (Nest Virtualisation allows you to run a Hyper-V server on an Azure virtual machine).

      Prices in the example shown below are in $ (hourly), based on Linux instances (CentOs or Ubuntu) running in Europe West Region:

      Read Microsoft’s blog on the new Virtual Machines here.

      If you’d like to learn more about how you can save with Azure instances, please contact us here.

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      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.