1 AaS 2.4 Understanding the Public Cloud Costs John Parker| Data Center Operations Management| Esri| Presented by: Tad Davies | SVP | Bick Consulting Services Jack Story | Distinguished Technologist | HPE Australia

2 Data Center World – Certified Vendor Neutral Each presenter is required to certify that their presentation will be vendor-neutral. As an attendee you have a right to enforce this policy of having no sales pitch within a session by alerting the speaker if you feel the session is not being presented in a vendor neutral fashion. If the issue continues to be a problem, please alert Data Center World staff after the session is complete.

3 Understanding Public Cloud Costs It’s a lot more than the cost of CPUs and Memory. This session will explore in-depth the costs associated with public cloud providers including virtual machines, networking, storage, data transfer, and related expenses.

4 Costs Model Approaches Decentralized vs Centralized One size does not fit all

5 Centralized Cost Model Policies and Procedures Governance Decentralized centralized approach

6 Centralized Concerns Over centralized Loss of Flexibility Loosely centralized Risk costs over runs

7 Decentralized Cost Model Create Guidelines More Education required Accountability

8 Hybrid Approach Use the best of both Departments/teams that manage well don’t penalize, look at what is working Match utilization models with best cost management process Processes should not impede key business drivers

9 Control Guidelines Workload provisioning & placement policies managed within brokerage / orchestration capability Cloud provider sell services not compute and storage Direct Cloud Costs or baseline costs Infrastructure, Network, build out costs Much easier to recognize and approve these costs

10 Control Guidelines Indirect Cloud Costs or On Demand Services Spin up as needed All needed is CC, PO on a subscription account 100 instances load test example

11 Control Guidelines Determining accessibility to CC, PO, PR or other process approved Who is using, approving, determining

12 Validation Differing Opinions- bill comes in: User Validation I need these???instances Accounting Validation Within the limits Manager Validation Multiple CC, PO, varying reasons

13 Unlimited Computing Power Cloud subscription services model (25K) Allows to purchases easily Subscription only constraint No procurement processes Procurement Sign offs, approvals, timelines VM Sprawl like

14 Wow Factor Monthly Bill Like a utility or Cell Phone bill except could be hundreds of bills Know there is a cost, but wait to see it May be high, may not

15 Constrain Usage- The Mathematical Equation 100 CC, PO’s x $2000 per month = X Number of services (times) Costs per service (times) time utilized per service = HEADACHE Does Accounting care or understand Over / under factor

16 Understand Usage- The Mathematical Equation Glacier Example… just one example…

17 We’re Tracking this right- the Realization Factor “We should be able to control the costs” We have processes and guidelines Is it: Accountability or lack of? The I do not understand factor?

18 We’re Tracking this right- the Realization Factor Controls in Place but issues occur User has their controls “I’m a product developer, not an accountant” Accounting has their controls Is it line by line or total CC costs Where is the alignment ???

19 We’re tracking this right- the after-words factor Like personal credit card Always playing catch up The equation again: CC1- January, CC2 February New user/employee CC1, CC2

20 Tools The need is there Many cloud management tools Choosing the right tool Manage the tool Understand the functionality of the tool Train everyone well

21 Credit Card Limits Why they don’t work Shut production down Stop developing Stop providing services Stop automated scaling when needed Hard to manage individual accounts: By team, by product, by project

22 On Premises Just purchasing a server or VM Already have staff, network, rack/stack, DC, power… It is the cost of doing business or “Operations Costs” CAPEX vs OPEX approaches Capacity Management 3 rd party managed on-prem cloud (Managed Private Cloud) Self-managed on-prem cloud (Self-managed Private Cloud) On Premises vs. Cloud

23 On Premises vs. Cloud Cloud Services: Purchasing a server, VM. Instance Network bandwidth-in/out, Storage, backups, elastic IPS, Multi regions, HA, networks, Load balancing And higher or more of Cloud Services are great at up selling Like an infomercial

24 Smart Cloud Spending Storing base Images Data, backups, DR Only paying for cost of the storage

25 Out of control base image spending DR has 100 images (only paying for cost of storage) 6 months to a year refresh Go from 100 to 200 images Remember to delete Testing Remember to shut everything down (processes again)

26 Ballooning Costs Factor Leave up for a day or so for verification Forget or the extra day(s) of costs Spinning up the environment for the base images

27 Monitoring Support Tools “ We have a service for that” Baseline, 24/7, managed services monitoring Security factor adds complexity to using your tools Because it is their Services/hardware

28 Licenses Costs Different models available By License vendor By Cloud provider Be cautious and be judicious Some are free Some are sticker shock

29 Training Technical training (more mature) Architecture Cloud Administrator *** Linux, MS more familiarity across platforms (Cloud, Colo, On Prem) Like a new tool training End User / Business unit Accounting Tools

30 Why Cloud Costs Are More Relevant Today 1.Cloud is maturing-used widespread 2.Reduce costs by understanding what the business is trying to do 3.Shared responsibility for understanding and managing (like security)  Accounting/finance, business, account owners, administrators 4.Key:  IT Management needs to be comfortable with their spending by understanding the spend

31 Cost Risks Security Privacy- 3 rd party provides secure data practices Litigation and retaining data Legal Audits, Warrants, net neutrality Patriot Act International data laws SLA’s States banning encryption

32 Summary Why does this need to be in the cloud Before adopting, develop a plan as you would any other project, have a standard configuration plan. Know business requirements Then do the math, then choose cloud or on Premises Understand which Applications work better for the cloud

33 Summary Continued It may be cheaper to move back on premises at some point Have a cloud exist plan for many reasons Don’t be fooled by basic service charges Don’t use add on services like elasticity, bursting, etc. unless there is a business requirement Understand billing from every cloud provider

34 Summary Continued Start small and expand On Premises VM sprawl and Cloud Sprawl Remember it is like a power or phone bill Cost/benefit/ROI Cloud Brokers

35 3 Key Things You Have Learned During this Session 1.Understanding roles and responsibilities 2.Must have process and procedures 3.Managing Cloud Services

36 ? Questions or Comments Thank You And enjoy Data Center World 2016

37 Contact Info: John Parker| Data Center Operations Management| Esri| Presented by: Tad Davies | SVP |Bick Consulting Services Jack Story | Distinguished Technologist | HPE Australia