This post is part 2 of a three-part series that explains how infrastructure analytics can be used to improve IT service delivery and reduce costs in a hybrid cloud environment. For a deeper dive, download the white paper “Data Insights and Control for the Service Provider Business Model.”
Business-level metadata is absolutely critical for controlling costs and deriving greater value from your IT infrastructure. For example, knowing that a certain storage system can provide the equivalent of $1 million worth of capacity isn’t particularly useful to anyone. However, if you can allocate and attribute that capacity down to the level of business units, users, or even individual developers, it creates awareness of where and how resources are being used. If you see that a business unit that isn’t contributing much to the bottom line is consuming more than its fair share of IT resources, someone in your company is likely to care about that. Ideally, you need to be able to tie every piece of physical infrastructure back to the activities of those who are using it, and at a granular level.
In a previous post, I discussed about how OnCommand Insight (OCI) delivers business insights and control to help facilitate process-based automation. This time I want to show how OCI delivers business-level metadata that is helping customers enable new operating models and control costs.
Creative Cost Reporting Can Change Bad Behavior
Showback reporting has been a bit of a failure in many organizations. When a showback report arrives at the end of the month, it might show that a user or business unit asked for a certain number of virtual machines and that each of them cost $1,000. However, this type of reporting is often viewed as “funny money” that is used only for internal bookkeeping. When the people consuming the resources have no incentive to change their behavior, it remains business as usual.
This is where the idea of “shameback” reporting comes in. NetApp customers have used OCI to implement these types of cost awareness reports after they discovered that showback alone was not enough to change behavior. Instead of just providing a list of resources with a cost allocated to each resource, a shameback approach shows the delta between the resources requested by a user or business unit and the actual level of usage, along with a ranking of the worst offenders. For example, if a business unit requests a platinum VM, but could have satisfied its workload with a bronze VM, a shameback report created using OCI makes this difference clear for everyone to see.
A creative approach to cost reporting can lead individuals to change their behavior. No one wants to be at the top of the report, so they learn to become more intelligent about the resources they request. When applied across a large organization, this type of reporting can lead to better resource utilization and big savings.
Smart Metering Increases Utilization Rates
A customer I work with in the UK recently noticed that the usage of AWS cloud services was growing rapidly, while the demand for internal IT resources was falling. It is a development-heavy operation, and a lot of developers were going to AWS, buying VMs to support a project, putting it on their company credit cards, and claiming it as an expense. That approach created a problem for the IT team, because they were losing customers to the cloud. It was also a potentially ticking time bomb for the offending business units with regard to compliance, security, and unanticipated costs. When you have no idea where your data is, you have no way of knowing how much this type of “shadow IT” activity is costing.
In this case, the IT team wasn’t competing with AWS on price or capabilities. It all came down to flexibility and agility. To help address this problem, we created a billing system for the customer that was essentially a phone bill for IT. It showed daily storage charges in GB/hour and hourly VM, CPU, and memory costs. Each report used a similar template, and charges for CPU, memory, and storage resources were tied back to the developers in various development teams across the different business units.
For this customer, the next step in attacking the situation is likely to be smart metering. Here in the UK, a nationwide energy plan called Economy 7 is one example of how smart metering can be used to change behavior. The plan prices electricity rates cheaper at night, when demand is low, to encourage customers to shift their usage to off hours. Data center operators often find themselves in a similar situation, with excess capacity at night, or whenever the off-peak period falls for their operation.
By offering customers—whether internal or external—price incentives to run workloads during off hours, you not only gain an opportunity to win back or keep customers, but you can also accommodate more data center activity without having to build out new capacity, add infrastructure, buy additional virtualization licenses, and so on. It’s kind of a win-win for IT. Of course, this scenario only works if you have access to analytics that allow you to track usage at fine granularity. OCI provides this granular view into infrastructure utilization.
Make Your Business More Competitive
It’s difficult to compete with hyperscale cloud providers on the perceived cost of providing IT infrastructure services, but you can compete by offering flexible consumption and pricing options tailored to meet the needs of the business. OCI provides data insights that allow you to implement new operating models to control costs and increase the perceived value of your IT services, while helping to discourage shadow IT.
Discover how NetApp customers are benefiting from infrastructure analytics in these blog posts and by attending the NetApp Insight conference:
- Part 1: How to Turn Data Into Insights With Infrastructure Analytics
- Part 3: How to Determine Which Workloads Belong in the Cloud
- NetApp Insight 2017: OCI Breakout Sessions