How we slashed 40% on cloud infrastrucure costs

November 11, 2023
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In the dynamic landscape of modern businesses, it is imperative to optimize costs while maintaining operational efficiency. Cloud infrastructure, a cornerstone for digital transformation, often comes with a significant financial burden when relying on major providers like AWS, Azure, and Google Cloud Platform (GCP). This article delves into our strategic decision to migrate to private clouds, resulting in a 40% reduction in infrastructure costs.

The Financial Challenge with Leading Cloud Providers:

While major cloud providers offer unparalleled services and capabilities, their pricing models can pose a challenge for businesses aiming to control and optimize their IT infrastructure costs. The pay-as-you-go approach, while offering flexibility, can result in inefficiencies and inflated costs, particularly when dealing with services that may not be fully utilized.

Case study:

This year, one of our clients approached us in regards with the need to optimize their cloud infrastructure since throughout 2022, they experienced significant growth. During this period, their monthly AWS monthly bill reached approximately ~$465,000 - $480,000.

The initial plan involved a comprehensive analysis of their existing infrastructure and operational needs and after a thorough assessment, we came up with a series of cloud optimization rules to enhance efficiency and reduce costs, tailoring the solution to their specific requirements, some of the rules we've came up with:

  • To address underutilization, we applied auto-scaling policies, dynamically adjusting resources based on demand fluctuations. ensuring optimal performance during peak hours while minimizing costs during periods of lower demand.
  • We identified and eliminated redundant resources and idle instances, leveraging AWS's instance scheduler to automate start and stop times.
  • We optimized storage costs by implementing data lifecycle management policies. We configured Amazon S3 lifecycle policies to automatically transition infrequently accessed data to lower-cost storage classes, optimizing storage expenses without compromising accessibility.
  • We implemented content delivery network (CDN) services to reduce latency and enhance the overall user experience. Utilizing AWS CloudFront, we strategically distributed content across global edge locations, accelerating data delivery and reducing data transfer costs.

Upon executing our plan, we had a cost improvement of around ~6% but we felt that there has to be more to it that meets the eye.

Following long internal discussions and months of testing and researching we came to the conlussion that the most efficient way to optimize the AWS bill was to get rid of AWS altogether (or at least get rid of compute and storage services) and migrate to private clouds.

Private Clouds: A Pragmatic Solution for Infrastructure:

The decision to migrate from established cloud giants to private clouds was not merely an endeavor to cut costs but a strategic move to enhance operational efficiency and financial sustainability. Private clouds presented a unique opportunity to gain control over our cloud infrastructure while aligning with our business goals.

What is Private Cloud?

A Private cloud (also known as an internal cloud or corporate cloud) is a cloud computing environment in which all hardware and software resources are dedicated exclusively to, and accessible only by, a single customer. Private cloud combines many of the benefits of cloud computing, including elasticity, scalability, and ease of service delivery with the access control, security, and resource customization of on-premises infrastructure.

After getting the green light from the client we started doing the ground work for the migration.

Migration Process:

The migration process involved a meticulous evaluation of their existing AWS infrastructure followed by a progressive migration of the AWS services they were using (ECS, EC2, S3, RDS), this detailed analysis and plan guided the transition to a tailored private cloud, ensuring that resources were allocated optimally to meet current and future operational requirements.

Following the migration's completion, their substantial monthly bill of $480,000 decreased to around $285,000, marking a significant ~40% reduction. This cost improvement provided them with greater financial flexibility to invest in various growth-related business requirements.

Key Business Benefits of Migrating to Private Clouds:

Cost Efficiency and Predictability:

Private clouds provide a cost-efficient alternative by allowing businesses to build and manage their exclusive cloud infrastructure without the financial constraints associated with proprietary solutions. The predictability of costs empowers financial planning and budget allocation.

Tailored Solutions for Business Needs:

Private clouds flexibility enables businesses to tailor their cloud infrastructure precisely to their operational requirements. This customization ensures that resources are allocated efficiently, eliminating unnecessary expenses on features that do not contribute directly to business objectives.

Strategic Vendor Independence:

Migrating to private clouds mitigates the risks associated with vendor lock-in. This strategic move empowers businesses with the flexibility to choose hardware, software, and services that align with their strategic objectives, reducing dependence on a single vendor.

Community-Driven Innovation and Support:

Private clouds benefit from a robust community-driven approach, ensuring continuous innovation and support. By leveraging the collective knowledge and expertise of the community, businesses can address challenges effectively, ensuring a seamless migration process and ongoing operational success.

Enhanced Security and Compliance Control:

Private clouds enhance security and compliance controls, providing businesses with the tools to meet industry-specific regulations. This not only ensures adherence to compliance standards but also instills confidence in stakeholders regarding data security.

Harnessing the Power of Private Cloud Solutions

We understand that our client's success story may not be universally applicable to all businesses, However we are confident that the advantages of a private cloud solution extend to most, if not all, enterprises of all sort or form.
If you're eager to explore how we can help minimize your infrastructure costs, don't hesitate to get in touch with us here.

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Eduard Popovici

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