Enterprise

2016 Cloud Predictions


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In the US, 2015 marked the point when cloud computing matured and became the go-to platform for a large portion of enterprise applications and data. The flexibility, scalability, and reduced CapEx costs drove this paradigm shift from traditional on-premise infrastructure. With public cloud data centers springing up around the globe, expect this trend to thrive overseas. Frankfurt, after all, was Amazon’s fastest growing international region mere months after its launch last year. I predict the new UK region will break that record.

In 2016, the industry will see an unquestionable maturing of offerings, with a focus on enterprise computing needs that go beyond test environments. Aside from that, here are some other areas to watch in 2016:

Business Level Automation:
So much flexibility in the cloud inevitably leads to sprawl. Idle instances left turned on, volumes active but not in use and test environments left running all weekend are just some of the things that can lead to management complexities and massive overspend.

Business-level automation of the cloud with platforms like CloudHealth allows executives to feel confident that their cloud spend is justified and that all resources are fully utilised. CloudHealth CTO and Founder Joe Kinsella explains this emerging market by what he calls, “the ‘Complexity Gap‘ – where the complexity of the building and managing cloud infrastructure is outpacing the ability of management software/services to contain this complexity.” No organization should waste precious DevOps resources by having them write and maintain automation scripts to manage their infrastructure. Employing engineers to keep up with Amazon’s pace of innovation (516 new features in 2014 alone) is, as Werner Vogels put it, like trying to fight gravity.

History in this space continually shows that trying to build and maintain a solution that is not core to your business will quickly become an unnecessary cost center. In 2016, enterprises will define policies that allow smart software to automatically drive governance and ensure that internal rules are followed.

Security Fears Will Wane:
With limited options for public cloud-native security solutions, Amazon stepped in with its web application firewall announced at re:Invent 2015. Just as traditional hardware vendors are becoming obsolete because of the cloud, infrastructure software is heading down the same path. Alert Logic’s Cloud Insight is an excellent example security management services that help companies identify loopholes that could put them at risk in the cloud. A majority of cloud security breaches are due to misconfigurations, so providers that can help monitor this risk and provide actionable recommendations will thrive in 2016.

Enterprise security is a complex problem to solve. Enterprises need a single solution that covers overall governance of their cloud environments. Even in the finance industry where security needs to be watertight, a recent study by the European Union Agency for Network and Information Security (Enisa) concluded that cloud security misunderstandings are a dime a dozen.

2016 will be the year when CTOs and CIOs enforce rules for working in the cloud…and they will do so with smart software that governs the entire estate.

Already happening…Tesco Bank – The cloud was “business as usual” within just 8 months in 2015.

Overseas IaaS Adoption Will Explode:
With Amazon and Microsoft launching data centers in the UK for the first time, expect massive adoption by UK businesses. This decision also reduces some of the problems associated with data sovereignty and data residency rules and lessens the blow of the invalidated US-EU Safe Harbor framework.

Long-standing British insurance company Aviva, which traces it roots as far back as 1696, expects to have 200 environments migrated over and running in AWS before the New Year. With Amazon and Microsoft expanding into India, China and Korea, massive adoption in Asia is also right around the corner.

 

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Demystifying Reserved Instances

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Everyone talks about them, many reserve them but there’s still quite a bit of mystery surrounding how they actually work. As long as the bill is paid and your application isn’t down, many don’t think twice about them. But, in order to maximize your ROI, there’s a few important concepts to be conscious of in your cloud strategy.

What Are They?

AWS Reserved Instances (RIs) allow you to make a time and cost commitment to AWS to use specific instance types in return for a discount on the on-demand cost. The other, sometimes overlooked, major benefit is, of course, the capacity reservation. While spot instances can and will be terminated at the drop of a hat, on-demand instances provide an hourly capacity guarantee but reserved instances ensure that your workloads will run uninterrupted for the length of your 1 or 3 year reservations.

How Do They Differ from On-Demand Instances?

It is a common misconception that RIs are directly connected to specific launched instances. They are not. Instead, they are a simply pricing discount applied to any instance usage of a specific type (e.g. m3.large in us-east-1a running Linux). In other words, all usage is always billed at the on-demand rate. If you launch an instance that matches the example instance type, region, availability zone and operating system, at the end of the month you will be billed within the discounted percentage shown above, rather than the base on-demand amount. That’s it.

How Do They Reduce My Cost?

RI Pricing

Think back to a time before landline phone plans included unlimited long distance minutes. Imagine a telephone service that charges $.05 per minute of usage, but $0.02 per minute to certain locations, provided that you subscribe to a particular plan. Once you’ve prepaid for a reservation, your hourly charges (think phone minutes) will be billed at a reduced rate, but only for calls within a certain region. Call one (think: launch an instance) that is outside of your subscription area (read: instance type, region, AZ and OS) and you won’t receive the discount that you signed up for. Because of this, it is critical to understand your instance usage by several factors, in order to maximize your return on investment.

Which Instance Gets The Discount?

Since multiple different reservation types (upfront amount and reservation term) and instance usage can match, the selection of a reservation gives preference toward applying the lowest hourly rate first. It’s also worth noting that reservations have an affinity toward the account in which they were purchased, although they can “float”. Assuming that you have more on-demand hours of usage for a different instance type of the same family, or even in a different AZ, reservations can be “modified” so that you receive the optimal cost benefit (more about this in a future post).

This randomized approach of RIs is both a powerful feature and a source of constant confusion. What I hear most from customers is that they purchased RIs for a specific environment or department, only to find out come bill time that its cost benefit has been applied elsewhere.

Keep your eye out for my next post on how reservations work with a consolidated bill and what it means when they “float”.

In the meantime, do you leverage RIs? If so, how are you managing them?

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Cloud Autonomics is the Future

re:Invent 2014 was certainly full of many surprises such as Lambda, AWS Config, RDS for Aurora and, of course, AWS’s commitment to the enterprise.

One of the biggest takeaways for my company was that while there are many cost optimization tools on the market, cost is just one of the features of our management platform. We’re all about optimization across all aspects of your infrastructure such as:

  • Cost
  • Availability
  • Usage
  • Performance
  • Security

Using a holistic approach, we not only deliver value through analysis and reporting for the CTO/CIO and their management team but we take it a step further and suggest the most optimal infrastructure recommendations. From there, we automate the changes and govern via policy driven actions. “It’s like Chef for the CIO” as my CTO is keen on saying (3:30 in the video). Check out his interview with Ofir Nachmani of @iamondemand below…

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