enterprise

2016 Cloud Predictions


crystal-ball-predictions

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.

 

twittergoogle_pluslinkedin

How and Why You Should Modify Your AWS Reserved Instances

 

[originally posted on LinkedIn Pulse @ http://linkd.in/1HndUik]

You can take your reservation discount with you, *almost* anywhere you go, provided you have the insight to do so. This ability is perhaps one of the best benefits of Amazon’s Reserved Instances as it provides insurance for those hesitant to commit to 1 or 3 year reservation terms.

This way, when your usage needs change, you simply switch your reservations to carry your cost reduction and capacity reservation wherever your usage leads you.

2 m3.med for 1 m3.large modification

Let’s imagine you’ve prepaid 2 Linux m3.medium reservations in us-east-1d but your usage has shifted almost entirely to Linux m3.large instances in us-east-1e. You can make an equal exchange of 2 m3.medium instance reservations for 1 m3.large (equal in the sense that the footprint is the same) and swap the AZ to match your current On-Demand usage. This will help to close the gap between number of reservations available versus number of instances in use.

2 m3.med for 1 m3.large

By doing so, you ensure that that you receive the On-Demand pricing percentage discount you’re entitled to. Otherwise, you’re missing out on the significant hourly discount and not chipping away at the amortized upfront amount you originally made to Amazon for the reservation.

While there are some cases where reservations cannot be modified (e.g.if terminating hours do not match as well as licensing restrictions on Windows boxes, etc.), the majority of them can easily be modified in the following ways:

  • Availability Zones within the same region (us-east-1a –> us-east-1c)
  • EC2-VPC and EC2-Classic
  • Different instance type within the same instance family (2 m3.med for 1 m3.large)

As your needs change, you needn’t be held prisoner to your reservations, or write them off at a loss; however, RI modification does need to be an integral part of your RI management processes in order to maximize your return on investment. If not, you’re just leaving money on the cloud table.

Modifications can be submitted through the AWS console, the API or automatically via a cloud management platform like CloudHealth®. How often do you check for modifications?

twittergoogle_pluslinkedin

How To Plan an RI Purchase in 6 Steps

AAEAAQAAAAAAAAOYAAAAJDZkYjUyMjM2LWRiMmEtNDg1YS04ZDJiLTA3Yzk1NzRiYWZiZg

 

[originally posted on LinkedIn Pulse @ http://linkd.in/1H5Kvvr]

Do Reserved Instances make you anxious? They shouldn’t.

A lot of people get caught up in all the different possible reservations you can purchase and wait months before making their first purchase.

Don’t do that.

Below is all you need to start saving money and take advantage of Amazon’s capacity guarantee today.

Step 1: Arrange Your Instances by Their Purpose

How do you group your infrastructure? By project, environment or application? Great. Put them all together and separate by OS and move on to step 2. If you mix Windows and Linux instances, it will complicate the entire process because of licensing and pricing differences.

Step 2: Figure Out the Cost

Once you’ve organized your instances into groups by their purpose, figure out what your current on-demand costs are and arrange your groups in descending order.

Step 3: Find Out Who Makes the Cut

Eliminate any groups or instances that won’t be running more than 65% of the time. Also eliminate any that you don’t expect to be running 1 year from now.

Step 4: Figure Out Where Your Reservations Will Reside

Once you’ve figured out the region (e.g. us-east-1 or us-west-1), you’ll need to specifically choose the availability zone where you currently have the most on-demand usage (e.g. 1a or 1b).

You’ll also have to choose whether they will reside within a VPC or in classic EC2 mode. For most newer customers your infrastructure will most likely already be in a VPC.

Step 5: Decide How Much You’re Going to Give AWS Upfront

Sometimes the increased savings you reap from all upfront reservations are not enough to justify their initial upfront fee. The table below shows how purchasing an all upfront m3.large reservation will cost $308 ($751-$443) more and only offer 2% more in monthly savings. Obviously the number of reservations will affect the dollar amount savings, so make sure to do the math regardless.

Step 6: Determine the Purchasing Account

Do you have more than one account linked to a consolidated bill?

You should:

a)   Purchase in the consolidated account if you don’t care about the capacity reservation. This option simplifies the purchase and management of reservations, but you’re not guaranteed to be able to launch an instance based on a reservation in a linked account if the reservation was made in another account.

b)    Purchase in the linked accounts if you want to receive the cost and capacity reservation of the RI, although the planning process will be significantly more complex. Note: Other accounts can still benefit from the associated discount if a valid instance isn’t running in the purchasing account.

Based on experience, the best advice I can give is to purchase reservations on an account-by-account basis.

Don’t want to spend all this time to model out your purchase? I don’t blame you. I used to do it before we released the RI Optimizer. Have it plan your most cost-optimal purchase in seconds.

twittergoogle_pluslinkedin

Reserved Instances Shouldn’t Give You Cold Feet

cloudcostscales

Keeping costs under control as your cloud infrastructure scales is no easy feat. To balance the two challenges, Reserved Instances provide substantial cost and capacity benefits. Their pricing discounts can even “float” across accounts that are linked to the consolidated bill to get the most of our your investment.

Afraid of Commitment? Don’t Be.

Although many fear overcommitting to Reserved Instances, a 1-year term reservation will almost always break even after 6 months. This is the point at which you can stop using that instance and still benefit from the reservation’s pricing discount. For a 3-year reservation, this break-even point typically occurs around 9 months.

With that said, if you’re worried about your usage needs changing down the road, it’s easy to determine whether reservations can still be more cost-effective than on-demand pricing. If all that concerns you is the instance type or availability zone, AWS makes it simple to modify reservations. In the worst case scenario, you could always sell them on the Reserved Instance Marketplace, provided you have a US bank account.

Pay Attention to the Payback Period

Taking this into consideration, the cost benefits become very apparent to organizations with infrastructure that is always-on. Using the effective rate formula we can easily calculate the exact number of months at 100% usage we need before we receive a price benefit. We call this the payback period. This metric is invaluable for mitigating the risks of reservations by identifying how long you must actually use them before they break even. It’s calculated by comparing the cash outlay for on-demand usage and the proposed offering over each month in a term, and then identifying the month at which the cost for the on-demand instance usage exceeds the cost for the reserved offering. There is no payback period for a no-upfront reservation, since they are less expensive than on-demand immediately.

Let’s take a look at just how cost-effective reservations can be over time. With a 1-year upfront reservation for an m3.large instance in the us-east-1a region you can expect to save 37% per month!

effective rate = upfront payment / reservation term / interval + recurring usage charges for interval

While the effective cost per month savings are certainly significant, let’s take a look at one of the more confusing behaviors of RI’s – their ability to “float” across accounts.

What Happens When My Reservations “Float”?

By default, reservations have a tendency to satisfy the needs of the account in which they were purchased. However, if there is no instance usage in a given hour in the purchasing account, the reservations can “float” to a linked account to take advantage of the reservation.

While the price reduction benefits of RIs “float”, it’s important to note that the capacity reservation does not. Therefore, if you have an available reservation in account A but want to launch an equivalent instance in account B, you have no guarantee that sufficient capacity will be available.

Stay tuned for the next post on the best practices of RI management – from modeling purchases to modifying them and beyond.

twittergoogle_pluslinkedin

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…

twittergoogle_pluslinkedin

2015 and the Cloud

Cloud-Computing-cap

With the New Year just days away, I hope that everyone is enjoying the holidays in the company of family and friends.

As we near the end of an exciting year in cloud, I’d like to reflect a little on what has been and what is to come. Since its introduction in 2006, there’s no doubt that the cloud is growing up. In 2012, the cloud was still a buzzword downplayed by naysayers. In 2013, cost analysis tools sprung up to help organizations leverage the cloud the way it advertised itself: cost effectively. This year, we witnessed the rise of AWS competitors like Microsoft, IBM and Google and DevOps became a part of enterprise vocabulary.

Here at the end of 2014, it’s clear that not only is the cloud here to stay, but it is a prevailing technology changing the way that businesses operate, enabling scalability at a level never before possible.

With AWS still the dominant cloud provider (see image below), 2015 will usher in a year of increased competitiveness as many businesses look to diversify their cloud (private and public) and run them in tandem based on workload.

CIS_2014_Q3

While Microsoft and IBM’s entrance into the cloud vendor space validated the cloud’s existence, it also underlined a new shift – enterprise adoption. Although AWS built itself upon startup infrastructure, this year’s re:Invent conference featured plenty of “all-in” stories and enterprise lingo (predictability, manageability, security, availability, etc) as Amazon seeks the enterprise seal of approval. As enterprises begin the transition to the cloud in 2015, it will be interesting to see how the deeply cultivated relationships and bottomless pockets of IBM and Microsoft affect the current market share.

No matter how long the transition takes, a few things are for sure:

2015 will be full of price wars… again. Backup as a business is not sustainable on its own and the leaders are all in a race towards achieving the greatest economies of scale. The winner takes all.

Docker containers will ship everywhere. Amazon, Google, Microsoft, eBay are already onboard.

The hybrid cloud will finally be a thing. But companies will need a consolidated single pane of glass view across all of them in addition to the ability to shift workloads automatically to and from and to automate manual tasks like killing underutilized infrastructure (one ring to rule them all).

Cloud hacks will be unavoidable. Governance failures, poor management and lax security will be the biggest culprits.

8 years after the cloud’s introduction, we’re set for its biggest year yet. Hold on tight…

twittergoogle_pluslinkedin