TradeTalks: Cloud Economics

Peter Vaihansky, SVP at DataArt, joins Nasdaq TradeTalks to discuss nuances of cloud pricing and share best practices for optimizing the cloud spend.

«The State of Cloud Survey 2018 respondents are] self- reporting to the organization that ran the survey that close to a quarter of their cloud spend is waste. The organization itself estimates it to be closer to one third. Either one is enormous.»

«The cloud providers will tell you that cloud is brilliant and beautiful because you only pay for what you need when in reality, it’s more like you pay for what you forgot to turn off. So first — know what you have. Find out if you have any abandoned or unattached resources and just shut them down. Second, build heat maps and dashboards to understand how your actual demand is spread over time. So, for example, if you have development environments running and you see that they are idling over the weekend, well, you can safely shut them down over the weekend. And that is two days out of seven you are not paying for anymore.»

«Many of those things can be automated with modern tools, and there is a plethora of those tools that are able to help you get visibility and clarity on it and manage your cloud cost even across multiple providers. Then you need to understand that there are discount options that you may be ... not taking advantage of. If you know that you have workloads running 24/7 much of the time, you can reserve the compute capacity, and that gives you 30, 40, 50 or more percent discount off on-demand prices.»

«Then there is what’s called Spot instances. They are called Spot Instances on AWS, they are called low priority VMs on Microsoft and, I think, Preemptible VMs on Google...At every given moment in time, those big hyper-scale cloud providers have massive amounts of unsold inventory, and they are willing to let you have it at a very steep discount- 80 to 90 percent off of the on-demand pricing with the caveat that when they need it back, they’ll take it away. But... you get a two-minute warning that your virtual machine is going to go away. If you architect in such a way that you are fault-tolerant and stateless and you can easily transfer the load to other instances that you can stand up, then you can take advantage of that enormous discount.»

«People come for the cost savings, but they stay for innovation and agility. It’s not about doing the same thing that you were doing yesterday for cheaper. It’s about doing the things you could not do yesterday. The main advantage of the cloud is obviously business agility — the ability to create new technology or change your technology frequently, safely, and reliably.»

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