Measuring the impact: Unveiling the savings realized in cloud cost optimization

Imagine embarking on a weight-loss journey without having a scale—it’s like sailing through uncharted waters without a compass. The scale serves as your trusted navigator, providing tangible metrics and keeping you on track.

Similarly, comprehending the savings realized in a cloud-cost-optimization journey offers valuable insights into the impact of your efforts. It’s like having a financial guide by your side, showing you the tangible benefits of your optimization strategies and motivating you to keep pushing forward. It highlights the areas of potential cost reduction and helps to allocate resources effectively.

In version 8.9.3, IBM Turbonomic has overhauled the way it collects and calculates the savings achieved, providing a clear and accurate view of your cost optimization efforts:

• It leverages the cloud provider bills to accurately determine the impact of cost optimization actions on your cloud expenses. This new approach ensures greater accuracy and transparency, effectively showcasing the tangible benefits achieved.
• The functionality has been expanded to capture savings and investments across various
  categories, including accounts, resource groups, regions and action types (among 
  others). This additional granularity empowers you to better understand the factors 
  influencing the cost optimization efforts, enabling informed decision-making 
  and targeted improvements

Understanding the realization of savings starts with defining that an action continues to generate savings from its execution until one of the following conditions is met:

• The current resource cost exceeds the cost at the time of execution.
• The resource is terminated.
• The resource is scaled to a tier that is not recommended by the product.

Then this definition is applied in the savings workflow:

• Once an action is executed on a cloud resource, it is actively tracked and we await confirmation of its successful implementation.
• On a daily basis, the product parses and internally stores the itemized bills from the cloud provider. This continuous process ensures that we have up-to-date and accurate billing information.
• Within this workflow, a constant search is conducted for matches between the executed actions and the detailed billing information. This enables us to establish a clear correlation between the actions taken and the corresponding charges incurred.
• When a match is found between the executed actions and the itemized bill information, we proceed to calculate the value of realized savings and/or investments.

To provide a clearer illustration, let’s delve into an example that demonstrates the application of this concept.

Consider a virtual machine (VM) with an initial cost of $2 per day. Assume that three scale actions are executed on consecutive days, beginning from Day 1:

• Day 0: The VM’s initial cost is USD2/day
• Day 1: A scale-up action is executed, increasing the cost to USD5/day
  • Investments: USD5 – USD2 = USD3
  • Savings: USD0
• Day 2: A scale-down action is executed, reducing the cost to USD4/day.
  • Investments: USD4 – USD2 = USD2
  • Savings: USD5 – USD4 = USD1
• Day 3: Another scale-down action is executed, further reducing the cost to USD2/day.
  • Investments: USD2 – USD2 = USD0
  • Savings: USD5 – USD2 = USD3
• Day 4: No actions are executed.
  • Investments: USD0
  • Savings: Still USD3

By analyzing this example, we can see how the defined concept of value realization is applied, calculating the investments made and the resulting savings at each step. This process captures the accurate financial impact of the executed scale actions on the VM’s costs.

The widgets are conveniently accessible within the cloud executive dashboard, available by default in various views such as Billing Family, Account and Resource Group. In addition to the default views, users have the flexibility to manually add these widgets to any supported entity type or create a custom dashboard. This customization allows for tailored insights using different ‘group by’ categories, enabling you to efficiently monitor and analyze data specific to your unique requirements.

IBM Turbonomic captures savings and investments resulting from various optimization actions, including virtual-machine scaling, database scaling, deletion of wasted storage and volume scaling. It also captures the impact from optimizing popular PaaS services like Azure App Service.

This is an ongoing journey, and we continuously expand our support, validating the efforts invested in optimizing cloud costs. We encourage the continuation of cost-conscious practices and aim to demonstrate the value of optimization to stakeholders.