A hybrid and multicloud environment looks great on the whiteboard. With the right tools, IT people can shift workloads between on-premises and public clouds quickly and easily — without refactoring or rearchitecting that can take months and pile up substantial costs.
Bigger troubles hit when the invoices from the cloud service providers arrive. Financial miscalculations can trip up everything, forcing IT leaders to strike a delicate balance between expenses and flexibility.
In late 2020, new technologies emerged that flipped the switch on for many businesses that had a cloud-first IT strategy. An economic analysis of these new tools and services could pave the way for industries to shift more quickly to a hybrid and multicloud operation, according to Steven Kaplan, vice president for customer success finance at Nutanix.
“In recent years, there’s been a mad dash to the cloud,” said Kaplan. “But many faced a rude awakening when they saw public cloud costs skyrocket out of control. It gave us all more reasons to find a better way with the right mix of owned and rented IT infrastructure and services.”
Kaplan, known as ROIdude on Twitter, spends a lot of time warning people about the hazards of plunging into cloud services without a savvy ROI strategy. When Nutanix Clusters on AWS was released in August 2020, he and a colleague dug into the technology and came up with a raft of surprising insights. They found that the economics of a hybrid and multicloud approach was now more appealing than ever before.
“It turns out that for most workloads, Nutanix Clusters helps mitigate cloud inefficiencies which significantly reduces the costs versus running cloud native,” Kaplan said.
That this is not the primary reason for evaluating Clusters. Instead, Kaplan points to the vastly reduced migration time to cloud, being able to use the same operating model and security practices as on-premises, and not requiring additional IT staff or IT skill sets.
“Nevertheless, the cost savings do provide some nice icing on the cake.”
Hybrid cloud is the ideal IT model for 86% of the global IT leaders who responded to the 2020 Nutanix Enterprise Cloud Index survey. Already 63% of respondents use two or more public clouds, a number expected to jump to 71% by the end of 2021. That’s a lot of people poised to make the kinds of missteps that Kaplan tries to help prevent.
Talking Sense on What Comes After ‘Cloud First’
In 2019, Kaplan wrote a book titled “The ROI Story: A Guide for IT Leaders.” Across more than 200 pages, he encouraged IT leaders to think through the myriad financial ramifications of cloud technologies. He advised crafting a strategic narrative for developing a hybrid cloud infrastructure that produces a solid return on investment.
“So many times, I'll be talking to organizations, and they’ll say proudly, ‘We have a cloud-first policy,’ And I’ll ask them why,” Kaplan said in an interview with The Forecast by Nutanix. “And they'll say, ‘Oh, the CIO told us to do it,’ or ‘the board thinks it'd be a good idea’ or ‘we want to save money.’ But rarely have they thought this out with analysis, research and data.”
After writing extensively on the financial ramifications of public cloud services, Kaplan faced a fresh challenge in the fall of 2020: examining the ROI on a new Nutanix service called Clusters, which enables hybrid and multicloud operations in bare-metal instances on Amazon Web Services (and is coming to Microsoft Azure soon).
This new multicloud tool allows workloads to move back and forth between AWS and on-premises data centers without the time and expense of refactoring applications. This can result in huge time and resources savings, said Kaplan.
Typically, that kind of flexibility would be a value-add that brings higher costs. But when Kaplan and Tim McCallum, a Nutanix colleague, started analyzing Clusters in action, they were overwhelmed with surprise.
“Tim called me on a Friday night and said, ‘It's a crazy thing. But I'm finding that people can save money in public cloud with Clusters.’ I said, ‘Oh, that makes sense.’ He goes, ‘No, no. They can save money, even including the price of Clusters.’ I said, ‘Well, that doesn't make sense’.”
After diving into the data over the ensuing weekend, Kaplan confirmed McCallum’s findings: Clusters allocates computing resources in ways that improve the efficiency of AWS bare-metal instances enough to yield genuine cost savings.
Hybrid and Multicloud Economies
Kaplan and McCallum summarized the results of their research in a white paper, where they described potential savings in four key areas:
- Micro-waste – Public cloud resources come in precise, “T-shirt”-sized packages (small, medium, large, etc.). Customers inevitably pay for resources they don’t use, generating micro-waste that can be substantial across a large enterprise. Clusters helps clients reduce this waste.
- Compute oversubscription – An IT professional can oversubscribe the compute resources available to a virtual machine in the public cloud. While cloud providers may offer limited oversubscription options, hypervisors that manage VMs can be configured to expand oversubscription, potentially lowering costs.
- Storage efficiency – Public cloud providers may lack advanced storage techniques such as compression, deduplication and thin allocation that allow more data to be stored within a public cloud server. These technologies are included in the Nutanix distributed file system.
- Hibernate and resume – Some workloads have to spin up and down often, adding to the demand for cloud resources. Clusters manages virtual machines in ways that limit the computing resources required to hibernate and resume operations.
Discovering this potential within the nooks and crannies of AWS bare-metal functionality was a significant breakthrough for Kaplan and McCallum.
“It was probably the most seminal work I've been involved with in all my years at Nutanix,” said Kaplan, who joined the company in 2013, four years after its founding.
Cost Savings Isn’t the Only Advantage
Soon after finding new economies in hybrid and multicloud, Kaplan had a chat with an IT leader for a government agency in Northern California that was preparing to enter the public cloud. He said the customer had extensive background in cloud, infrastructure and security, including multiple patents.
Kaplan assumed an IT veteran with such deep knowledge would be skeptical about claims of new discoveries in the multicloud realm.
“By the end of a 20-minute call he said, ‘We want a Clusters POC now. We want to partner with you on this’,” Kaplan recalled.
Kaplan’s conversation saw the big-picture promise of a fast and flexible hybrid and multicloud solution. A tool that enabled the agency to manage on-prem and public cloud without little new training and no new hiring could be a game changer.
“He'd be able to move extremely quickly, to have the same operating model between both environments, the same security policies and a single management plane for both environments,” Kaplan said. “For him, he said, ‘This is what I need to get to cloud much faster, to get a more stable environment.’ And the savings is icing on the cake.”
It’s Not About Cloud First; It’s About Cloud Smart
Kaplan noted that Nutanix Clusters essentially virtualizes the entire IT ecosystem because it abstracts public and private clouds with a single cloud platform. He suggests this innovation could prove just as important as virtualization, which revolutionized IT by using software to emulate the operations of hardware.
But IT leaders should not assume cost savings when paying for processors, servers and bandwidth in the cloud.
“Virtualization was just such a no-brainer economically,” he said. “You've got all these other benefits like high availability, replication for disaster recovery and reduced administration. There's no way you cannot save money.
“With cloud computing, that absolutely is not the case. You can be put out of business really quickly if you don’t manage your consumption wisely.”
He said IT decision makers need to do some homework, map things out, crunch the numbers and create a plan.”
“It should be a cloud-smart strategy — not a cloud-first strategy.”
Tom Mangan is a contributing writer. He is a veteran B2B technology writer and editor, specializing in cloud computing and digital transformation. Contact him on his website or LinkedIn.
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