Optimizing multicloud costs: Three real-world case studies

Multicloud is when an enterprise uses more than one cloud platform to fulfill a specific application’s needs. This strategy has been gaining popularity because of its advantages. Multicloud can be composed of private, public, and hybrid clouds to accomplish the enterprise’s goals. For example, an enterprise may use platform-as-a-service (PaaS) from one vendor, and software-as-a-service (SaaS) from another vendor, and email-as-a-service from yet another. Enterprises select a multicloud strategy because of the advantages it offers, including cost efficiencies, more choice, and adherence to local policies. It is also flexible, enabling enterprises to adopt a “best of breed” approach to the cloud to meet different business needs. Another notable advantage of a multicloud strategy is that enterprises can avoid vendor lock-in and switch between clouds if needed. But every multicloud strategy must include a discussion of multicloud costs. Here are a few notable real-world examples where multicloud helped organizations achieve their goals:

1. Icertis transforms its business with multicloud

multicloud costs

Icertis is a software company providing contract management software to enterprise businesses. The firm needed a solution that can scale to its vast customer base located all around the world. Icertis had selected Microsoft Azure as their cloud because of its PaaS offerings. Also, their existing relationship with Microsoft via the .NET development platform meant that they could get more mileage from their legacy applications that were already built on the Microsoft platform.

As the firm expanded its investments in Azure, senior management acknowledged the need for a cloud cost management platform. They wanted to understand their cloud spend and utilization of their existing infrastructure in terms of capacity, and thus they intended to find out the firm’s revenue against their spending. Eventually, they opted for CloudHealth, a provider of cost management, governance, automation, and security solutions, owned by VMware. With this, the firm gained clarity and visibility into their cloud spend and they could track monthly projections along with streamlined planning for resource capacity building.

As Azure virtual machines and SQL databases make up 60 percent of the firm’s infrastructure, they leveraged right-sizing recommendations to resize or modify their non-production environments automatically. CloudHealth’s Reserved Virtual Machine Instance management capabilities also come in handy to optimize their resource utilization. Now, besides saving time, the firm is also able to drive efficiency and reduced its cloud-spend by opting for the right solutions without having to depend upon a single cloud service provider. The cloud solutions are helping the firm to generate quick and easy-to-share cost and utilization reports. As a result, the firm has been able to save 30 percent to 40 percent on its cloud costs month-over-month.

2. VR Group’s digital transformation to optimize their operations

VR Group is a government-owned railway company based in Finland, providing passenger rail services with 250 long-distance and 800 commuter rail services every single day. With its 7,500 employees and net sales of €1,251 million in 2017, the firm is one of the most important operators in the Finnish public transport market area. The company is customer-driven and wanted to achieve mobility and data services for its customers. For VR’s future vision, they wanted to lead the development of these services by using the public cloud.

When using the public cloud, the development of new services must be fast and agile. So, the VR Group needed reliability of services with better user experience and overall cost of the service. Their specific need was multicloud mass migration, implementation of DevOps culture and modernization of their legacy app. To fulfill their requirement, in 2014, they adopted and started using new Azure cloud technologies. They chose the multicloud solutions provider Nordcloud, which provided adoption consultation for Azure. The multicloud solution provider built the required cloud infrastructure with 24/7 managed cloud services for this project.

The firm also wanted to use the AWS cloud platform, so Nordcloud helped them build a platform for new services and provide consultation. After creating this new platform, Nordcloud began to handle and monitor all VR Group’s cloud environments. In 2017, the firm wanted to migrate its first wave of applications to AWS. So, Nordcloud’s team of cloud architects joined VR’s own IT team, and they developed the foundation for the AWS cloud platform collectively with VR’s in-house IT department and cloud architects. Nordcloud’s cloud architects also designed the baseline for the infrastructure as well as automating the infrastructure, and utilizing the chosen technologies (for example, terraform). The developed platform offered VR both customized bills and cost optimization with great accuracy. As a result, the use of multicloud technologies resulted in significant cost savings for the VR Group.

3. Segment optimizing their operational efficiency while using containers

Segment is a platform for customer data infrastructure that allows businesses and organizations to collect and aggregate all analytics data on their websites and then feeds that data to the corresponding analytics platform they are using. It offers a complete data toolkit to every team in the organization, which helps them clean, collect, and control data and user events from the user’s mobile and web apps. With over 5.8 billion end-users worldwide, the firm’s dynamic cloud environment needed improved visibility and tracking to manage their containerized workloads efficiently.

Most of Segment’s cloud environments are containerized and running on Amazon Web Services. Their teams rely heavily on Amazon Elastic Container Service (ECS) to handle their stateless workloads, along with a smaller portion of resources running on Google Cloud Platform. Because of its expanding cloud footprint, their cloud resources would get exhausted quickly, so the firm’s IT team wanted to analyze its cloud bill and optimize their costs. The firm also relied heavily on autoscaling, which in turn made their cloud spend highly dynamic. To solve these problems and make sure that the business would continue to work efficiently, they chose CloudHealth, a third-party cloud-management platform to get visibility into container workloads and get assistance with tagging. With this multicloud management tool, the firm is now able to make sure that the cost of goods sold does not spike if a particular type of customer pushes the limits of its infrastructure. Single unified dashboards across different services helped their engineers get a better understanding of the cost problem. For managing cloud spend better, they also set up auto alerts that would alert the Segment team if there were any notable or unplanned spikes in cost. Via these automated alerts and unified dashboards, the Segment team was able to efficiently mitigate the risks of any unplanned cost increases, while enjoying the benefits of multicloud.

Multicloud strategy and multicloud costs

The multicloud strategy has a significant advantage for enterprises where the different business units require a specific service from a particular cloud-hosting provider. The availability of multicloud management solutions like CloudHealth and Nordcloud has enabled IT teams to shift their focus from cost management, governance, and automation to their actual line-of-business applications. With this, organizations have the liberty to choose the best cloud solution with the most comfortable rates based on their specific IT needs. This strategy is also cost-effective, where the competitive market strives to offer optimal pricing for different resource capacities. This trend is expected to grow, and many more organizations are expected to gain the advantages of a multicloud strategy.

Featured image: Freepik / Background vector created by quinky

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