In this blog, we demonstrate how one of our customers was able to reduce cloud operating costs by 50% and mitigate the risk of future cost spikes. The customer also used the increased visibility provided by CloudHealth to rearchitect its infrastructure in order to increase margins by 20%.
Earlier this year, our eBook “Trends in AWS Spending 2019” identified a six-fold increase in spending on AWS´ container services. The increased spend had been predicted for some time, and—when the management of Amazon ECS containers was simplified with the arrival of the AWS Fargate service—the prediction came true. Due to the cost efficiency of container services, we expect this trend to continue.
However, the adoption of container services does not come without its own challenges. Container costs can increase just as quickly as instance costs, and spikes in operating costs can often be unpredictable. This was a predicament faced by Segment—a data infrastructure company that collects, stores, and routes customer data from 80,000 websites—who turned to CloudHealth for help in reducing its costs.
How Segment was able to reduce cloud operating costs
Segment´s customer database includes a number of large enterprises who can generate immense volumes of data during peak traffic events; and, in order to scale up quickly on demand, the company predominantly uses Amazon´s ECS service. In mid-2018, the company saw a significant increase in the Cost of Goods Sold (COGS) which had a negative effect on its overall growth.
To gain visibility into what was driving up COGS, Segment implemented the CloudHealth platform and set about tagging resources. This allowed the company to analyze costs for each part of its system and set up automatic alerts for cost spikes. Cost spikes were treated with the same level of urgency as if they were production issues, with post mortems held after each event to discuss their causes.
Segment found that one of its biggest cost drivers was over-provisioned containers on multi-tenant clusters. The company also found it was incurring more costs than necessary for load balancers, data transfers, and S3 storage. With the granular visibility provided by CloudHealth, it was able to rearchitect its system in order to reduce cloud operating costs by 50% and increase margins by 20%.
Find out more about the Segment story in our webinar
In September, three of the leading minds behind Segment’s reduction in cloud operating costs joined us for a webinar, in which the process is explained in greater detail. You can hear Tito Carriero, Travis Cole, and Albert Strasheim talking about how Segment was able to reduce cloud operating costs by 50 percent—with help from the CloudHealth platform—by following this link.
Alternatively, if you would like to find out more about how CloudHealth can help your business reduce cloud operating costs, do not hesitate to get in touch. Our team of cloud experts will be happy to discuss any issues you have with identifying cost drivers and will organize a free demo of the CloudHealth platform tailored to your business´s specific requirements.
The opportunity also exists to take a free trial of CloudHealth to evaluate its capabilities in your own environment. The free trial comes with full technical customer support, a library of useful resources, and access to the CloudHealth Academy—through which your users will learn how to make the best of each of CloudHealth´s capabilities.
