Cloud Cost Optimization Solutions : Understanding The Key Vendor Segments

A 2022 research by Flexera involving over 750 global cloud decision-makers has revealed that an estimated 32% of cloud spend is wasted by organizations on average. That’s more than a third of your cloud investments going down the drain. Alarming, isn’t it?

No wonder we witnessed a 75% increase in Cloud FinOps initiatives across organizations globally. (Read more on how to raise Cloud Cost Awareness among your teams).

Most of the time, in-house cloud personnel could handle cloud FinOps tasks only as a part of another, larger job function. So, a dedicated FinOps partner becomes a smarter choice for organizations.

But, with a broad spectrum of FinOps solutions out there in the market, which one should organizations trust with the responsibility of governing and optimizing their cloud infrastructure? If you are at a similar crossroads, this blog might help you gain a better understanding of the vendor segments and make an informed decision that suits your needs.

The Cloud FinOps lifecycle involves three phases - Inform, Optimize and Operate. This blog classifies the FinOps vendor landscape based on their alignment with one or more of these phases.

To read more on further classifications, check out this report by ISG Research.

Fig: Cloud FinOps Vendors’ Landscape

Cost Analytics Platforms

Cost optimization initiatives need readily-available information on resource utilization, cost breakdowns, usage forecasts and so on. This helps identify provisioning issues, manage idle resources and ensure cost-effective cloud operations. FinOps vendors who address this real-time cloud infrastructure visibility are the Cost Analytics Platforms or Cloud Financial Management (CFM) Solutions.

Catering to the Inform phase of the FinOps lifecycle, CFMs provide a reporting mechanism on cloud usage, spend patterns, budget coverage and even discounts and chargebacks. Most vendors also provide security and data privacy-related insights, lending an additional support to the customer business functions.

However, please note that these platforms might need access permissions into the customer’s cloud setup or the cloud provider accounts.

CFMs provide detailed and elaborate cost insights, helping organizations in identifying costly virtual machines, zombie/idle resources, and even data transfer costs. Additionally, with the help of various cost thresholds or percentage deviation alerts, organizations can keep track of their cloud budgets and commitments and prevent the costs from spiraling out of control.

They also help in allocating cloud spend and resources across the organization by leveraging AI-based resource tagging tools. These tools, based on a custom tagging strategy, bring better cost visibility and ownership across business units, accounts, etc.

Cloudability, Densify and CloudHealth are some of the vendors who fall into this category.

Savings / RI Management Tools

As the organizations scale up their user base, changes in their cloud usage volumes could become quite dramatic from time to time, leading to large gaps in cloud resource provisioning. Mending these gaps with On-demand instances, however, is a surefire way to have cloud cost overruns and a deeper dent in cloud budgets.

Commitment-based discounts like AWS Reserved Instances, and Savings Plans, can help manage this to some extent. But without proper resource planning, forecasting and rightsizing in place, organizations are still left with under-provisioned or over-provisioned reservations.

Getting trapped in this vicious cycle of cloud wastage and unbudgeted expenses is a story that most cloud engineers are familiar with. This is where the Savings / Reserved Instances Management Platforms come into play.

Mostly driven by AI-powered Automation Engines, these vendors help organizations by performing resource provisioning and workload management on their behalf. These platforms use real-time usage data and predictive analytics to track and forecast application needs. Based upon this analysis and projections, these tools buy/sell reservations dynamically in the AWS Secondary Market, or sometimes within their own customer network, bringing in substantial cloud cost control.

Majorly impacting the Optimize Phase of the FinOps lifecycle, these platforms usually offer very high savings potential, in the range of 50% - 60%. The On-Demand instances provisioned by customers are usually billed as per 1-Year or 3-Year RI pricing. Customers benefit from the vendors’ volume and committed term discounts while maintaining complete flexibility.

Vendors under this category mostly support Standard Compute Reservations only, like EC2 instances, with an exception of a few who support Savings Plans, EBS Storage Volumes, etc. But none of the vendors offer guaranteed savings. However, like Cost Analytics Platforms, RI Management tools also require certain access privileges to the customer’s cloud setup.

ProsperOps, Zesty, Spot.io, nOps and Cloudwiry are some of the vendors that fall into this category.

Resellers & Managed Service Providers

At times, organizations require a third party to manage their entire Cloud and IT Infrastructure and end-user systems. By delegating cloud operations to an expert cloud partner, companies can focus on improving their business without worrying about extended system downtimes or service interruptions. Managed Service Providers (MSPs) would be perfectly aligned with fulfilling these requirements.

Driving the Operate phase of the FinOps lifecycle, MSPs offer a broad range of cloud optimization services like cost management, budgeting and reporting, expert guidance and architectural reviews, 24x7 support, and so on.

This segment also includes Resellers, who are able to provide discounts to the customers because of the volume and scale they manage. They mostly do 1-year or 3-year RIs with Cloud platforms and are able to pass on some percentage of savings as guaranteed discounts.

MSPs make sure that all the applications, databases and related frameworks get to leverage enough cloud resources for optimal performance, while reinforcing their security and data protection standards. They also provide dashboarding, analytics, right-sizing, and right-costing services to their clients which would help them reduce their overall cloud spending.

Most of these vendors possess multiple competencies, like the AWS Well-Architected Review, DevOps, Cloud Migration and more. They can perform periodic architectural reviews and help companies enhance their overall cloud strategy, thus, helping organizations in ‘building better’ rather than ‘buying better’.

Rackspace, Intervision, Bespin Global and NTT Data are some of the prominent players in the category.

A One-Stop End-to-End Cloud FinOps Solution - Too Much To Ask For?

Could we find a FinOps partner who helps manage reservations and save big on cloud bills, offers infrastructure reviews and guidance and also provides state-of-the-art cloud analytics software for in-depth cost insights?

While most vendors focus on a specific domain and a niche set of practices, there are a select few who have proven their capabilities and scale in all the three vendor segments. These Holistic FinOps Service Providers offer an entire spectrum of FinOps services to their customers across all the three phases of the FinOps lifecycle.

They offer superior savings in comparison to other vendors, by leveraging exclusive relationships with hyper-scalers, large volume reservations and a vast client base. With a team of certified Cloud and DevOps experts and cutting-edge cloud usage analytics tools, they provide a well-stocked Cloud FinOps arsenal to their clients.

CloudKeeper is a prime example and one of the highest-rated service providers in this space. CloudKeeper has two major offerings, each of which can be mapped to different vendor spaces.

CloudKeeper Auto is an Automated Savings / RI Management Platform that dynamically optimizes AWS Resource Utilization and Workloads. With the help of an AI engine, the platform analyzes the organization’s usage patterns and provisions resources accordingly. It also uses the AWS Secondary Market and the CloudKeeper Client Network for the Buying and Selling of AWS Reservations, thereby offering a superior savings potential of up to 50% - 60%.

CloudKeeper AZ, on the other hand, is a comprehensive Cloud FinOps Solution that caters to the entire FinOps Lifecycle by offering Savings, Software and Services. The solution offers Guaranteed Savings for its customers on their entire AWS bills, right from Day 1. CloudKeeper is also an AWS Premier Partner and offers periodic reviews and guidance from AWS Certified Cloud Experts which could bring about significant improvements to the customer’s cloud infrastructure.

CloudKeeper AZ also offers complimentary access to its proprietary Cloud Cost Analytics platform, which gives resource-level cloud usage data and actionable cost insights, with no additional permissions or privileges. The platform is also available as a standalone offering from CloudKeeper.

Time to Introspect

The FinOps vendor marketplace is currently witnessing a paradigm shift. The vendors are introducing more mature solutions, improving their understanding of unit cost metrics, and leveraging AI and Machine Learning more often. With years of experience in the FinOps industry, they now possess a better knowledge of the cloud cost challenges and could help immensely in redefining cloud cost reduction exercises.

It's upon the organization to introspect on their needs and aspirations and choose the right FinOps partner, who will help them accomplish most of their Cloud FinOps goals, maximize their business value and benefit each and every stakeholder involved.

We’d love to show you how CloudKeeper makes your Cloud Cost Optimization efforts go that extra mile.
Book a free demo today!