This November, AWS made waves by dropping a bombshell announcement: “AWS does not permit the sale of reserved instances (RIs) obtained through a discount program made after October 1, 2023” — a reference to an existing policy, and the signal of its renewed enforcement. The upshot? AWS is banning the resale of discounted RIs in their RI Marketplace. (See the full policy here, section 5.6.)
The ban officially goes into effect on January 15, 2024. For AWS customers who lean heavily on Standard RI resale to generate savings, some cash is coming off the table — and it will be prudent to combine their automated solutions with an engineering-led approach to cloud efficiency.
There is substantial value in platforms that take an automated approach to cloud savings — and not all automated platforms are impacted equally by AWS’s new ban. ProsperOps, for example, is among the most sophisticated platforms for generating a portfolio of Standard RIs, Convertible RIs, and Savings Plans — and works on an entirely automated basis. ProsperOps will face little to no impact from the new ban and has always operated within the AWS Service Terms.
These platforms work best in combination with an engineering-led approach. An engineering-led approach puts cost control in the hands of the people with the most power to impact it: your engineers. When engineers have granular, real-time data on the cost to build and run their cloud infrastructure, they can prioritize cost efficiency from day one, leading to both speedy and sustainable innovation.
In this blog, we’ll talk through the benefits of combining automated savings with an engineering-led approach, and explain how AWS customers can use this combination to avoid negative financial impacts from the RI resale ban.
Why AWS Customers Should Combine Automated Savings With An Engineering-Led Approach
AWS’s updated enforcement of existing policies will impact their customers differently. To those who lean heavily on Standard RI arbitrage for savings, it will come as a splash of cold water; for others, it should prompt an audit of their cloud efficiency strategy, and an evaluation of whether they’re getting as much as possible from both the engineering and financial sides of cloud cost management.
The engineering and financial sides refer to organizations’ two main cloud cost challenges:
- Understand what you’re spending and why
- Optimize your spending — maximize the ROI of every cloud dollar you’ve chosen to spend
Step 1 — what and why — requires an engineering-led approach. The foundation of an engineering-led approach is visibility: allocating 100% of your cloud costs to the correct sources, and attributing cost accountability to the correct teams and engineers.
What this gives you: a comprehensive understanding of how all the elements of your business framework contribute to cloud spend, and who’s responsible for each element.
That way, when resource costs change, you know exactly where they’re changing and exactly who’s responsible. This includes unwelcome changes: cost spikes that you want your team to nip in the bud before they spiral out of control. It also includes welcome changes: cost reductions that you want to concretely attribute to cost-aware engineering.
CloudZero ingests 100% of your cloud spend (AWS, Azure, GCP, Snowflake, Databricks, MongoDB, and whatever else you might be using), normalizes it in a common data model, and allocates it in a model that mirrors the structure of your business.
Then, having understood your cost centers, you can take definitive action to address Step 2: Optimize. Make sure you’re using appropriately sized resources, make intelligent resource provisioning decisions, and maximize the efficiency of the financial side of cloud usage.
This is ProsperOps’s bread and butter. ProsperOps helps AWS customers balance Standard RIs, Convertible RIs, and Savings Plans. Because Convertible RIs can be modified in place via the Convertible RI exchange process, without dependency on an external marketplace (like Standard RIs), their Convertible RI methodology is not impacted by AWS’s recent announcement.
How Drift Used CloudZero And ProsperOps To Supercharge Their Cloud Efficiency
Drift, a B2B SaaS marketing product, faced a slew of cost management challenges: too much time spent on manual reporting for too little value, limited visibility into spend drivers, and insufficient tooling for cost optimization. In concert, CloudZero and ProsperOps helped Drift tackle all these challenges — and more.
Results:
- $2.4M in annualized cost savings. In their first year with CloudZero, Drift found $2.4 million in annualized cost savings.
- A meteoric jump in Effective Savings Rate (ESR). ProsperOps boosted Drift’s ESR to 41.2%, vaulting them into the 96th percentile of AWS savers.
Read the full case study here.
Take Control Of Your Cloud Spending With CloudZero
The Standard RI resale ban will no doubt come as a splash of cold water to some AWS customers. But like that low-temperature splash, it should double as a welcome wake-up call to adopt a more modern approach to cloud cost management.
Autopilot was never a comprehensive approach to cloud cost management. And now, it’s less effective than ever.
Gain complete visibility into your cloud spending. Empower your engineers with real-time data about the cost to run their cloud infrastructure. Replace a reactive approach to cloud savings with a proactive approach to cloud efficiency, and set your organization up for efficient innovation in the cloud.
Ready to dive in? Schedule a CloudZero demo today.
The Cloud Cost Playbook
The step-by-step guide to cost maturity
