Hybrid Cloud Cost Optimization – How to Reduce Cost While Enabling Digital Transformations | HCLTech

Hybrid Cloud Cost Optimization – How to Reduce Cost While Enabling Digital Transformations
July 07, 2020

The COVID-19 pandemic has, in many ways, affected the human lives and businesses. Our business leaders and CIOs are reviewing their businesses and estimating the impact of COVID-19 situation. However, at the same time, they are also exploring the various areas to reduce their cost. The COVID-19 pandemic is fast changing the way organizations do business. Now all the organizations are looking for agile ways of working along with consumption-based models so that they are able to support the various ups and downs in the business requirements based on the market conditions. CIOs intend to prepare their organizations to thrive in the upcoming turns and are exploring hybrid cloud-based solutions as a differentiated approach to meet their demands with less capex cost investment.

The digital transformations using various new innovative technologies can help organizations reduce the cost, agility, and productivity and support the speed of the organization change so that they are ahead of their competition. This speed of transformation will be further powered with cost reduction-based transformations in digital IT.

Business Continuity Planning

There are certain key elements that businesses need to consider on priority to ensure seamless continuity with automated disaster recovery tools, storage replication, and high availability. Based on the various scenarios, use cases, size, complexity, and RPO/RTO, various business continuity planning (BCP) services from different public cloud vendors and OEMs can be purchased. Use of private or public cloud on consumption-based model can be the best approach for data recovery (DR) requirements and system integrators (Sis) can help in configuring and seamlessly moving the workloads between on premise, and proposed hybrid cloud environment for BCP needs. Various services such as hot/cold DR scenarios with on-demand DR site will help organizations reduce their overall DR cost.

With ‘Cloud First’ Strategy and increased cloud adoption, the agile technologies, #Containers and other cloud optimization techniques can help to reduce the overall cost in multi-hybrid cloud.

Consumption-based Services

The overall budgets of IT teams are reducing, but they are expected to deliver solutions faster. The organizations are looking at newer ways to reduce their capex cost and buy the infrastructure on the consumption-based service models. The shift to utility for everything is helping organizations minimize their risks on upfront cost and accelerate their businesses.

In the present situation, companies are looking for options to make their cost structure leaner, more variable, and flexible. The customers are exploring the outcome-based private cloud model with pay-as-you-go service with standardized catalogue using the next-gen infrastructure technologies.

The hybrid cloud model based on highly reliable and ’always on’ platform services along with the seamless orchestration, automation, catalogue-based consumption, and software-defined techniques will help customers adopt real time based infrastructure view and do the billing for actual consumption of hardware. This utility-based consumption will help the organizations adopt cloud services on premise in a dedicated manner with zero upfront cost.

Cost Optimization will drive Cloud Technology Adoption

In this new era of hybrid cloud, public cloud solutions are available from various OEMs such as , Amazon, Google, VMware, and IBM. These solutions are helping the CIOs think about the pay-per-use model and cost saving on the initial investment but on the similar line, various hardware manufacturers are proposing the consumption-based models for the organizations to setup their private cloud on premise. CIOs would develop a formal strategy that helps put individual cloud decisions private or public in the context of the enterprise’s strategic goals, security requirement, and infrastructure lifecycle management.

Not just the adoption of public cloud services for IaaS/PaaS, organizations are also struggling with the security and network integrations. The organizations who are adopting the public cloud as cost reduction tool are using multi-cloud deployments with two or three cloud service providers so as to reduce their dependency on one cloud provider. Also, pre-validated configurations and out-of-the-box implementation approach helps the organization with 30% faster adoption of cloud technologies and up to 40% reduction in cost.

Controlling Cloud Operations Costs

Using the pay-as-you-go model of public cloud technologies will help the organizations reduce their cost significantly. Using the various optimization techniques of cloud resources waste management, the overall cloud cost can be further reduced.  Some of actions that organizations can look upon which will help them control their costs are:

  • No cloud first or cloud only strategy: Today, most of the workload can be moved to the cloud. However, there are many applications that do not support the hyper-scaler feature and thus will not be benefited when migrated to cloud.  Assessment tools helps the organizations identify the workloads that are right fit for cloud.
  • Aligning business outcomes with KPIs: Application- led migrations helps organization choose the PaaS or SaaS services in place of IaaS with cost advantage. Adding the business outcomes ensures the value-to-spend analysis to support cost awareness and reduction.
  • Use the cost calculators: The cost calculators offered by major public cloud providers allow organizations to compare the costs of services and choose the ones that best meet your needs—and budget.
  • Consider lift-and-shift initiatives carefully: Over-provisioned on capacity is the common overspend on lift-and-shift migrations. With proper sizing based on actual consumptions and not for peak and leverage cloud-native services helps in better cost optimizations.
  • Automate the ability to start/stop instances: Automate start/stop instances when they’re not being used. Stopping unused instances automatically can help keep costs down.
  • Use a centralized management tool: This helps you track spends while using multiple cloud service providers, enabling you to easily track the services you’ve paid for and adjust as needed.

Using these cloud operations, cost management, along with a governance model in place will help the organizations reduce the overall cloud spend cost.

Use of Containerization

Developers write code in their local environment and when they push it from staging to production, the incompatibility in environments creates the trouble. The application code shows errors in production environment which might have work smoothly in the staging environment.

With the use of containerization, the application code can be separated from the underneath infrastructure and the OS. Developers can use the small container images that is independent of OS, libraries and other dependencies.

Use of container-based applications will have the following advantages over VM-based applications:

  • Containers don’t have any data related to the OS libraries and thus are very light weight
  • Being lightweight containers consume lesser infrastructure, and have better operational cost
  • Containers needs less maintenance efforts due to their self-healing capability
  • Containers have independent service scaling capabilities

These container-based application delivery with reduced infrastructure will help the organizations reduce their operations and infrastructure cost by 20-25% with new ways of agile working. 

Data Optimization

In this age of information, the whole world is being driven on the wheels of information. Every industry invariably is changing its business models to embrace as it supports creation of useful information which can be utilized later to take strategic business decisions. To support this, an integrated information management approach drives the economics of cost, storage, and management. Today, organization are struggling with:

  • High rate of growth data
  • Massive amount of dark data
  • Congestion on production storages
  • Cybersecurity attacks on data
  • New technology enhancements such as flash drives and Optane
  • Tightening compliances such as Hippa and GDPR

The various turnkey managed service offerings from various OEM vendors provide critical information  assessment to streamline the information protection and reduced downtime. Other governance parameters such as dark data identification and archival of data with policies and deletion of unwanted data also helps reduce the cost by 30% - 50% depending on the data type.

In the present COVID 19 situation, to begin or accelerate a transformation journey for cost reduction or adopting the new agile technologies, companies must first know where they stand.  Organizations must gauge themselves on the digital maturity index against the industry standard for readiness, agility, operating model, data, and technology. This will allow organizations to:

  • Compare themselves with their competitors in digital technology adoptions and time-to-market
  • Identify their strengths and values over their competitions
  • Prioritize the digital transformations which can help in reducing cost and maximizing investment

In addition, unified dashboards with artificial intelligence or machine learning platforms can accelerate breaking down the divisional information silos, aggregating spend across the enterprise under one unified view. A consolidated data view allows organizations to better track and tackle costs from different divisions across the organization, and quickly determine trends or impact over time as well as savings opportunities.

Last but not the least, this is the time when all the organizations have to leverage the power of transformation  and enterprises should prioritize and execute their half-yearly or quarterly NextGen digital transformation roadmap and optimization plan which will help them reduce the ripple effect of the COVID-19 situation.

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