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One of the key advantages of the cloud is cost savings, and yet cloud costs are on the rise and overspending by as much as 70% is commonplace, according to Gartner. Much like gyms make their money off members who never actually use the equipment, cloud providers profit from those who underutilize their resources. That’s a problem for financial leaders and IT leaders trying to govern digital transformation costs and tighten their budgets in response to economic pressures. With cloud spending doubling every four to five years, it pays to cut cloud costs.

But how do you get a handle on your corporate cloud spending?

From Infrastructure as a Service (IaaS) to Software as a Service (SaaS) and Unified Communications as a Service (UCaaS), here are four leading strategies for cutting cloud costs.

1. Eliminate redundant cloud applications

This advice sounds basic, but it’s easier said than done. Getting the visibility to see both sanctioned and unsanctioned applications can be a challenge. Technology is key. Cloud expense management platforms help establish a centralized inventory of all cloud applications and infrastructure services currently in use. Cloud Access Security Broker (CASB) security technologies can also be helpful. Gaining deep visibility is the first step in reducing app redundancy and improving cloud security.

Those who do it best plan a cross-functional project tapping into data from Single Sign On systems, as well as financial expense systems. You’ll want to identify the most cost-effective app consolidations and rank your apps based on cybersecurity risk. This helps teams prioritize response efforts around app elimination and security polices for acceptable cloud use.

2. Reduce cloud infrastructure waste

With a centralized inventory, the next step is to reconcile infrastructure usage against ownership. The key is to know what you already pay for and how efficiently you’re using it. All too often, companies overestimate their needs and resources go underutilized. There are many examples, whether it’s an ambitious IT engineer wanting a big piece of infrastructure so he can sleep at night, data transfers triggering unnecessary charges, or virtual servers forgotten after their owner left the company. In some cases, servers will run for no reason at all.

Cost analysis efforts take on exercises in:

Evaluating your IT environment over periods of time, creating usage benchmarks aiding the analysis of traffic charges and storage forecastingUnderstanding how and when to use pausing features to ensure you’re paying for IaaS services only when you need themKnowing when to remove or downgrade infrastructure — the same way you downgrade a phone plan from unlimited data to a lower tierOptimizing costs for direct network connections to cloud providers, as the provider’s service is not always the best optionExploring spikes in IaaS usage and knowing when retention plans create unnecessary backups burning a hole in your pocket

Software powered by artificial intelligence can “see” these types of inefficiencies instantly, bringing forward misappropriated tags and cost savings recommendations informed by normalized data and pricing information updated in near real time. Beware: Default dashboards from cloud providers will not deliver cost optimization insights. Nonetheless, the data is available. Simply plug in analytics tools to reveal savings. It’s not uncommon to immediately find 20% in savings and achieve a triple-digit ROI in the first year.

3. Improve cloud management productivity

When cloud innovation can mean the difference between winning and losing in the market, IT teams should be spending more time transforming and less time worrying about how their cloud resources are being used and managed, how expenses are reconciled or allocated to business units, and how needs are forecasted. IT staff efficiencies are cited as one of the most important benefits of moving workloads to the cloud, but those productivity gains can be undermined by manual vendor management tasks.

Outsourced services can offload the manual work of IaaS usage audits, application optimization, and expense management. They’re also helpful in bill pay, contract renewals, and integration projects following mergers and acquisitions.

4. Put checks and balances in place

Give a leader or team the authority to govern the cloud. Create initiatives to reassess assets with cost top of mind, understanding that the long-term strategy is to create thoughtful usage that allows room for more meaningful cloud adoption as innovation evolves. Allow this team to work beyond defined perimeters and identify cloud usage policies in addition to key risks in the areas of finance, IT, and security. If you have more than 50 applications and more than two cloud infrastructure providers, consider a dedicated resource or ongoing partner program. 

The cloud triggers other reasons for oversight. Challenges include cloud application performance and reliable connectivity issues when increased cloud usage demands more of the IT network. With a team experienced in effective cloud expense management, companies are better guided through modernization initiatives, deploying SD-WAN solutions designed to manage 5G and internet service providers cost-effectively.  

Payouts worth the investment

In the end, don’t expect to tackle all four steps at once. Prioritization is key. Investments in cloud cost management have a high likelihood of paying for themselves, as benefits materialize in dollar savings, productivity gains, and security. If companies spend 2023 evaluating cloud costs and ensuring their spending aligns with needs, efficiency, and innovation are sure to follow. Now, is the time to inventory and reconcile cloud assets. Right-sizing will help avoid cloud investment hangovers and empower companies to effectively govern the past three years of innovation run amok.

To learn more about cloud cost optimization, visit us here.

Cloud Management, Cloud Security, Endpoint Protection

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , ,

Originally an online CD store, CD Baby now primarily deals in “music as a service,” serving 700,000 independent music artists by managing the distribution of over 10 million unique tracks through download platforms and streaming services such as Spotify. In parallel, its IT team manages the consequences of software’s move to an as-a-service model.

It’s not just the way CD Baby ships product that has changed since VP of IT Tom Beohm (pronounced “beam”) joined the company in 2010 as a lead systems engineer. “My role has evolved dramatically in those 12 years,” he says. “I’ve seen two complete revolutions of our technology stack and infrastructure.”

The first of those revolutions was the move to virtual servers and centralized storage. Now he’s moving to a hybrid cloud model and further consolidating storage infrastructure.

Beohm’s team of nine IT staff provides operations, engineering and database administration support for around 200 employees at CD Baby. And support for SaaS applications — including an ongoing move to a cloud-based ERP platform — comes within that too.

SaaS spending is growing

CD Baby isn’t the only company consuming more software as a service: While Gartner is less optimistic about SaaS spending growth than it was at the start of the year, it still expects global SaaS spend to increase 16.8% to reach $195 billion in 2023.

Behind that increase, though, lie some challenges because IT departments don’t always manage, or even know about, all of the increased SaaS usage.

“I view software-as-a-service as the current extension of shadow IT,” says Beohm. That really made itself felt on the help desk: “We started to see requests coming from our user community, saying ‘Hey, I need help with product X,’ and my help desk team has no idea, which raises all kind of red flags.”

Some of those requests were driven by the expansion of CD Baby’s parent company Downtown Music Holdings: as the group grows, CD Baby employees find themselves working with colleagues in other divisions and needing to use their SaaS tools. “There are other things going on in our ecosystem besides what IT knows about,” he says.

Beohm’s initial approach to filling in those knowledge gaps — both his own and those of the users calling the help desk — was to ask staff who knew they needed a particular tool to talk about it with IT so they could help with adoption.

“The level of success we’ve had with that has been mixed because it’s an on-your-honor system. What we found is that we don’t get the visibility we really need to be successful,” he says.

That led Beohm to start looking for a SaaS management platform (SMP) that could help. At around the same time, he says, his boss suggested something similar. “IT being offered resources and money is very rare, so I jumped on the opportunity,” he says. Beohm researched a number of options and proposed one to the rest of the leadership team, which accepted.

Application discoverability

“The number-one driver for me was application discoverability. It’s the unknown unknowns, what you can’t see, that I was the most interested in knowing more about. In our evaluation of the SMP space, the only product that filled the gap for our use case was Torii,” he says.

Some SMPs gather data from the ERP system, looking at what services the enterprise is paying for, whether through IT department purchase orders or credit-card charges from marketing, but Beohm wanted to see what employees were actually using.

“The piece that really made the difference was a browser extension that was cross-platform, that I can install on PCs, on Macs, in multiple browsers, and it has a comprehensive view into what’s being used in our environment,” he says.

The extension, rolled out through CD Baby’s mobile device management platform, needed some explanation.

“One of the challenges we initially had with our user community was, ‘Hey, are you rolling out spyware? Are you monitoring my keystrokes? Are you monitoring my productivity?’ It was a big topic for folks, especially in the pandemic era,” Beohm says. Torii provided documentation for CD Baby staff explaining that it was simply gathering anonymized data about applications in use in the company environment. “I also hosted open office hours to answer individual questions. There were some concerns initially, but I think we were able to address those pretty successfully,” he adds.

As soon as the browser extensions were installed, they started generating data — and then came the real challenge. “It was less in the data gathering and the rollout process, and more the ‘Now what?’ question when you discover there’re several hundred applications being used in our environment that we had no idea were there,” he says.

Beohm has been leaning on Torii’s workflow automation capabilities to tame that barrage of alerts. Now, if someone tries out a new tool, he can tell Torii to note it — but then take further action until other users start to try it out too. “That’s really helped us manage the proliferation of the one-time-use scenario and not burn a lot of staff hours in evaluating things that don’t need to be evaluated,” he says.

Preparing for contract renewal

Other workflows automatically flag SaaS contracts coming up for renewal, warning IT via the ticketing system, and application owners and executive sponsors via Slack. “It gives us that runway for either a tool switch or to properly negotiate what the terms of that next contract renewal are going to look like,” he says.

While reducing costs wasn’t Beohm’s primary goal, it is happening: “When we have new hires, we have a suite of internal IT applications we issue. We’d just go buy seats. Now we can say, ‘Do we need to buy seats, or are there seats already available in the services that we can just reuse?’ We’ve been able to save thousands of dollars — north of $8,000 in Microsoft licensing alone — by having the visibility into seats that are available so we don’t have to purchase.”

Security has improved too. “One of our teams was using a tool, and we saw it in Torii, but we saw other individuals on other teams using it too,” says Beohm. He recommended to the owning team that the company consolidate the vendor contract to include all users: “We’ve been able to reduce our complexity, provide a more secure interaction with the SaaS service by putting MFA and SSO in front of it, and continue to allow the users to have the tool with the governance of IT.”

Once a quarter, Beohm takes what he learns from Torii to the other C-suite executives and discusses who’s using what, and what to do about it. “It’s been a great conversation, because it’s been empowered by data,” he says. “It’s been really positive so far.” Beohm encourages other CIOs to look into SaaS management platforms to learn what’s going on their networks. The purpose must be communicated to colleagues carefully, though: “We’re not trying to be SaaS police,” he says. “We’re trying to help you be as successful as possible, using this tool to benefit you and the company from a security, usability and cost perspective.”

ERP Systems, SaaS, Security

Posted on Posted in Digital transformation, General topics Tagged with , , , ,

By: Scott Dennehy, Edge Innovation at Aruba, a Hewlett Packard Enterprise Company

As the adoption of cloud and other as-a-service offerings has accelerated in recent years, so has the number of acronyms used to describe these offerings. In some cases, the acronyms are used interchangeably, confusing the service that is being delivered and consumed.

Let’s look at 3 prime examples:

Software-as-a-Service (SaaS)Infrastructure-as-a-Service (IaaS)Network-as-a-Service (NaaS)

SaaS is defined as any software application delivered and accessed via the cloud in a subscription-based offering. SaaS spans a variety of internet-based applications every day, with popular CRM tools like Salesforce and HR apps like Workday, representing good examples of this.

IaaS is defined as the use of IT hardware and software infrastructure components like compute power or storage, utilized through the cloud in a flexible consumption or subscription-based model. Like SaaS, it is an all-inclusive category that can span the entire IT infrastructure portfolio from compute to storage to networks. Examples include Amazon Web Services (AWS) and Microsoft Azure.

NaaS is different from SaaS and IaaS because it relates only to networking functionality, (i.e., networking hardware, software, and services) delivered in a “cloud-like” motion, which implies subscription-based or consumption-based billing. Sometimes the term NaaS is expanded to include the outsourcing of day-to-day operations and management of a network environment to a third party, such as a networking vendor or partner.

This is where it can get confusing. For example, enterprise network management platforms (e.g., Aruba Central) delivered and consumed via the cloud are sometimes considered NaaS, as they are a form of networking technology that is delivered and consumed as a service. These platforms meet the technical definition of SaaS and must be included as part of a broader subscription-based offering that also includes networking hardware, additional software, and service components to be considered NaaS.

Some consider the networking resources included in AWS or Azure subscriptions a form of NaaS; but, these offerings meet the technical definition of IaaS, as the networking resources are not decoupled from compute and storage.

Various forms of NaaS have existed for many years, such as the network connectivity provided by telecommunications companies or the managed networking services provided by Managed Service Providers (MSPs). Now, a new form of NaaS is emerging, whereby networking vendors are offering solutions in a subscription-based model, either directly to end customers or through channel partners.

All of these are reasons why in a recent research study conducted by IDC1, more than one-third of respondents claim to have already deployed NaaS, with another 35% saying they plan to deploy NaaS within the next two years.

Want to learn more about NaaS and how Aruba can help you get started on your NaaS journey? Visit arubanetworks.com/naas.

1Source: IDC Infobrief sponsored by HPE Aruba Networks, Network as a Service: State of the Market, Doc # US48889622, Mar 2022

Networking

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

In July, cloud-based subscription management platform provider Zuora hosted events in Melbourne and Sydney attended by leading executives from global and Australian recurring revenue businesses. Discussions covered a multitude of topics, but one that participants returned to time and time again was complexity as it related to technology.

Digitisation of industry has created remarkable opportunities and allowed for efficiency of a kind previously unimaginable. This shift has brought about radical simplification. What was once strictly manual can now be automated; a process that yesterday might have taken a week might now take a day – tomorrow it may take just hours. This all-encompassing disentanglement has led to rapid growth, entirely new client and consumer expectations, and ultimately, perhaps ironically, to an ecosystem of (mostly) cloud services with a complexity all its own.

Responding to customer needs

Scott Westbrook is the Vice President of Data & Technology for Deputy, a shift worker management software provider based in Sydney. At the Zuora event he said that client feedback isn’t just taken seriously at the company; it’s treated like a precious metal.

“When a Deputy user tells us about a problem they’re having or a function they require, that message is immediately sent around the company. It’s on the Slack channel for multiple teams. The CEO is looking at that sentiment as closely as anyone.”

But this dedication to serving clients and adapting to shifting or novel requirements – a hallmark of strong subscription companies – brings with it evermore elaborate protocols, processes and software solutions. In other words, in the quest to demonstrate continued value to clients, and as the company grows into new regions with different taxation laws and regulations, avoiding complexity is impossible.

“From the outside, you look at what we do and you think ‘That’s really easy’ but it’s actually incredibly complicated. We have more than 40,000 customers,” Westbrook said.

For Carbar, the vehicle subscription startup founded in Melbourne in 2016, the challenge of complexity is related to growth, as well, but also to major changes in company strategy.

Kieron Wogan, Cheif Marketing Officer, Carbar

Zuora

Chief Marketing Officer, Kieron Wogan, said at the event that an average Carbar customer subscribes to the service for more than two years. After that period, many “churn” not because they find the service unsatisfactory but, on the contrary, because they decide they want to own the car they enjoyed using through Carbar.

“We realised we could be involved in both the subscription side of car use, but also in the next step. So we’ve partnered with CarClarity to help customers in this situation to convert their subscription into a loan.

“The genius of this proposition is the ‘and’. Rather than subscribe or buy. We now offer customers the opportunity to subscribe and then buy.”

The aim is to create a simpler, more seamless service for the customer, understanding that this naturally leads to what Wogan describes as more “moving parts” at an operational level.

“If it doesn’t plug straight in, we’ll look elsewhere”

At the centre of all this complexity is often a very simple question: “Will all the digital platforms talk to each other?”

Message Media is a good example of just how critical this question is in the subscription economy. Founded in 2000, the B2B company helps businesses send messages to their customers. Success led to growth and the opportunity to expand both organically and through acquisition. It also led to global industry attention, and in 2021 Swedish software-as-a-service giant Sinch acquired the Melbourne-based company.

Igor Zevaka Director, Product Delivery, Nearmap

Zuora

What’s followed is a need to integrate and migrate platforms, making certain that, for example, a Zuora product (Message Media uses Zuora Billing), harmonises with platforms like Salesforce and Zendesk used by the subsidiary or parent company. 

This connection, which must be immediate and involve minimum friction, is important for all except the most steadfastly analogue companies, but essential for those who offer cloud services. As Igor Zevaka, Director of Product Delivery at aerial imagery company Nearmap, put it: “How does it all fit together? Can I plug in a platform and expect it to work in my system straight away? If I can’t, we might have to look elsewhere.”

Who’ll serve the service providers?

With all this being the case, a company like Zuora, offering the kind of billing, revenue and collection software that is imperative for any subscription company, the complexity of client businesses leads to complexity for their own.

Nick Cherrier, Zuora APAC Chair, Subscribed Institute

Zuora

Nick Cherrier is the APAC Chair of Zuora’s Subscribed Institute and says that Zuora has responded to this multiplicity with a significant transformation.

“Zuora has greatly accelerated the pace of its product releases in the last few years. We realised we needed to be more agile and get these products, or features, into the hands of customers as soon as possible. They’re stable, but there’s room for iteration. We want to evolve them while they’re in use rather than letting the perfect be the enemy of the good.

“Our Revenue product is a good example of that change in mindset. It was and remains an excellent product, but as a product we obtained through acquisition, there were some initial challenges integrating with our existing suite. We changed that and today we see that customers with the top Net Promoter Scores are those that use the complete chain of Zuora Billing, Collect and Revenue. That lines up with a joint study we conducted with McKinsey recently, which demonstrated subscription businesses with optimised quote-to-cash processes grew four times faster than their peers.”

What’s the right approach to complexity?

None of the executives at the Zuora events spoke of complexity as a hurdle to step around. For them, it was a challenge to be overcome, a puzzle to be solved, an inevitability to be welcomed.

“At the moment, much of what we do is done on a monthly basis. We work on MRR [Monthly Recurring Revenue], so that metric makes sense to a degree. But as we’re predominantly usage based, it also means you need to make predictions based on what happened last month, which can be very complicated,” Westbrook said, referring to Deputy’s approach to forecasting revenue. 

“I want to move to doing things on a daily basis. When you’re seeing data come through in real time you don’t need to make those complicated assumptions anymore. It opens up a whole world of different options.”

Cherrier says that embracing multiplicity, as long as it’s supported by seamless software integration and judicious management, can become a competitive advantage.

“Complexity is not something companies should shy away from. As a company matures, it will add products, price models, expand into new territories and segments, add payment methods, even acquire or merge with other solutions.

“The key to success is to ensure you find the right balance in your design choices between complexity and simplicity. It has a material impact.”

SaaS