Enterprise IT teams concerned with cloud cost management have new FinOps options built into the observability tool as forecasts about next year’s global economy grow increasingly pessimistic.
Inflation, conflicts such as Russia’s war in Ukraine and the ongoing COVID-19 pandemic will slow global economic growth from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023, according to a report this month by the International Monetary Fund.
In response to these macroeconomic concerns, the business rush to cloud computing over the past two years, fueled by the pandemic and fueled by an “open checkbook” for IT, has now begun to give way to pressure to reduce IT spending, according to a report released this week by Andy Thurai, vice president and principal analyst at Constellation Research.
Most organizations — especially organizations that haven’t matured their digital operations — are one major incident away from bankrupting themselves.
Andy ThuraiVice president and chief analyst, Constellation Research
“The onset of the COVID-19 pandemic has forced businesses to move online faster than they would like, instead of evolving or improving their digital maturity,” Thurai’s report said. “While some of those digital transformation projects have met expectations, most organizations — especially organizations that have not yet matured in their digital operations — are one major incident away from bankrupting their self.”
A haphazard approach to digital transformation has led to tool sprawl that threatens the reliability of enterprise services, Thurai’s report asserts. Observability, where all types of data from all systems in an organization are consolidated into a single repository, will be essential to reduce this tool sprawl and improve enterprise IT reliability in the future, according to in the report.
“Monitoring is about knowing at all times what is going on in your systems and whether anything is going to break in the near future,” Thurai reports. “Wide-scale bolting on monitoring and management after applications are deployed is no longer sufficient.”
Observability vendors are playing musical chairs as users seek consolidation
To capitalize on these trends, observability vendors, many of which began as application performance monitoring (APM) specialists, continue to expand the types of data they collect. Tools from vendors such as Dynatrace and New Relic now include logs and traces in addition to metrics and events. These vendors have also expanded data analysis to include application reliability and security in addition to performance, in a bid to become their customers’ choice for tool integration.
This week, as scrutiny of IT costs continues to intensify, two observability vendors, Datadog and Sysdig, also added FinOps support. FinOpsa more recent term for IT cost management, is a blend between financial and IT operations.
A Datadog customer who presented this week during the vendor’s annual Dash conference said the vendor’s new Cloud Cost Management FinOps add-on is timely.
“Given the current macroeconomic climate, there has been a renewed focus on Opex, and as a result, more scrutiny around cloud costs,” said Martin Amps, chief engineer at online clothing subscription retailer Stitch Fix, in a conference breakout session.
Stitch Fix got beta access to Cloud Cost Management, which it added to its software engineer’s observability dashboards. amps showed an example of such a dashboard during the Dash conference keynote, which included data on the Amazon Relational Database Service (RDS) spending.
“Our plan works subtly, but successfully; the service owner is guilty of optimizing their service,” he said. “Before, they were spending $430 per day on RDS but were only using a fraction of the clusters’ capacity. With this additional insight, they determined they needed to resize their cluster usage, saving 78%.”
‘Real-time usage data changes the game’
In its first version, which became generally available this week, Datadog’s Cloud Cost Management is limited to evaluating AWS services on virtual machines, although support for more cloud providers and Kubernetes environments is planned. Cloud Cost Management costs $7.50 per host/per month for Datadog users.
Sysdig, with its roots in container monitoring and security, is taking a different tack with its first release of a free Cost Advisor feature this week. Cost Advisor focuses only on resource utilization within the cloud Kubernetes environment but supports AWS, Azure and Google Cloud Platform.
Both Datadog and Sysdig’s FinOps tools issue alerts about cost overruns and rank the services with the most value within customer organizations. The Datadog service highlights daily, weekly and monthly spending changes, while Sysdig Cost Advisor puts real-time and historical cost data into a time-series database for long-term analysis.
These tools join other recent additions to FinOps, including open source Cloud Custodian and Apptio, which partners with ServiceNow. CI/CD tools from Harness.io can also embed FinOps data into developer workflows.
Cloud cost management tools aren’t a new concept, either, said Gregg Siegfried, an analyst at Gartner, citing past examples like CloudHealth, now VMware Aria Cost, and Turbonomic, among others.
What’s new is the widespread use of public cloud providers, which have standard billing rates and from which observability vendors can collect up-to-the-minute usage data, Siegfried said. In contrast, cloud provider tools like AWS Cost Explorer have a latency of about 24 hours between resource usage and delivery of cost data.
Quick access to cost data can be used to predict and prevent cost overruns, in the same way that observability data can help to predict and prevent performance or availability failures, according to Siegfried.
“Suddenly, everyone is concerned about the costs of the macroeconomic climate, and now we have that with data available to us in relatively real time,” he said. “Real-time usage data [delivered] in a way that you can make workload placement decisions based on how it changes the game and makes the whole thing more interesting.”
Monitoring itself requires cost management
Reducing the number of tools and the associated licensing fees can have a clear impact on IT spending. In addition, the kind of predictive analysis observability tools can perform on large amounts of extensive data can save organizations from dealing with costly cascading incidents in production.
But as distributed systems grow and expand to encompass edge computing locations for enterprises, collecting more data for observability tools can itself lead to cost overruns without careful planning.
That’s the case with Yum! Brands, parent company for restaurant chains including Taco Bell, KFC and Pizza Hut, replaced multiple IT monitoring tools for its e-commerce sites with Datadog in late 2021 and then sought to extend the aggregate observability of 53,000 restaurant locations.
The amount of data collection at those multiple locations could have generated an estimated 14 billion lines of log data per week if Yum! Brands import all logs from all locations, said Sivaram Adhiappan, director of site reliability engineering at Yum! in a Dash conference presentation. It didn’t reach that scale, but it still collected enough data to crash its edge observability system early in its launch.
“Things started to get a little out of control, the logs were too much, the cost was going up, and then one of our Datadog instances killed the production logs,” while the restaurant locations -online, says Adhiappan. “We started diving into log-based metrics and rebuilt our dashboards based on metrics … and when issues arose, we could rehydrate a narrow slice of the logs to figure out what is happening.”
This and the addition of Datadog’s Live Tail log parser and exclusion filters cut an estimated 30% to 40% of log data ingestion costs for the restaurant rollout, Adhiappan said.
“If you look at the volume of logs coming in and the top five or 10 [log types]the ‘printer out of paper’ keeps coming up all the time for us,” Adhiappan said. “We’ve been able to start making a little more progress there with exclusion filters.”
Beth Pariseau, senior news writer at TechTarget, is an award-winning veteran of IT journalism. He can be reached at [email protected] or on Twitter @PariseauTT.
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