May 17, 2021
In early 2000s at New York JFK airport about to board a flight, I noticed the plane’s wings were twisted at their tip. I was both curious and flustered as I imagined a rough turbulence mangling the tips of the wings. A crew member was happy to clarify that the wing twists were intentional and generated cost savings by improving the plane’s aerodynamics. My weekend research led me to learn that winglets (as they were called) can reduce fuel costs by an astonishing 3% **. Winglets are now a standard feature on most commercial airplanes, delivering savings of 4% to 6.5% on fuel costs.
There are numerous such improvements, in which a single change brings about significant cost reduction across an entire industry. While a 3% reduction in fuel costs is substantial for a massive industry such as commercial aviation, it pales compared to the potential cost reductions that can be realized by Cloud Optimization.
In this series of articles we will cover:
- 3 Reasons WHY Cloud Optimization Matters
- 3 Reasons WHY Cloud costs go Haywire
- 3 Strategies Absolutely Essential for Cutting Cloud Costs
A brief look at three reasons WHY Cloud Optimization matters
1. Reductions can be substantial
Cost reductions can be substantial; Not a mere 2-5%, but often 35% or more, potentially up to 65%. We regularly achieve savings of this magnitude for our customers.
Simple Scenario: In most organizations, Dev and QA teams use their IT infrastructure on weekdays (Monday – Friday) from 8 am-7 pm. This comes to a total of 55 hours out of a 168-hour week, providing an opportunity to reduce costs by a whopping 67%.
2. Higher gross costs hurt your company’s valuation
Cloud costs count towards gross costs. As CFOs can attest, assuming all other aspects are the same, an organization with lower gross costs will have better profitability, better budgets to invest in the future and higher valuation***.
Cloud costs are a necessary expense but cloud wastage, on the other hand, has a multiplier discount effect on a company.
3. Improved Security, Agility
Security: Fewer resources lead to reduced attack surface in turn improving security.
- One of the results of cost optimization is the cleanup of resources, including the purging of no-longer-used resources and stale backups, logs, and archives with no current value.
- Purging stale resources leads to fewer resources, which in turn, leads to lower attack surface and improved security.
Agility: Cloud cost optimization typically involves Improved structure, controls, and processes. This helps reduce surprises and in turn reduces time to market.
Most IT departments realize their cloud setup is not optimal. But with the daily operations taking the front seat, cloud optimization efforts often get relegated to the background. While cloud wastage is often treated as a temporary one-time expense, the real cost to an organization is much higher. In the next article, we will look at the factors that lead to increased wastage in cloud environments.
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