The Frugal Architect, Law I: Make Cost A Non-Functional Requirement

This is part one of seven in our Frugal Architect blog series.

In case you weren’t as giddy as CloudZero was at re:Invent this year, we wanted to recount the seven laws outlined by Werner Vogels, Amazon’s CTO, which he’s bundled into a framework called “The Frugal Architect” (check out the whole framework here).

What is “The Frugal Architect”? A constitution of sorts for how engineers can build high-functioning, cost-efficient cloud software. A roadmap to sustainable innovation — and, we have to assume unintentionally on Vogels’s part, the vision by which CloudZero was founded and operates.

In this blog series, we’re going to run through each of the seven laws in “The Frugal Architect,” going over what they mean and why CloudZero is the optimal platform to power each.

Law I: Make Cost A Non-Functional Requirement

Thus spake Vogels:

A non-functional requirement specifies criteria that can be used to judge the operation of a system, rather than specific features or functions. Examples are accessibility, availability, scalability, security, portability, maintainability, and compliance. What often goes overlooked is cost.

Companies can fail because they don’t consider cost at every stage of the business – from design to development to operation – or because they’re not measuring it properly. The math is simple: if costs are higher than your revenue, your business is at risk.

By considering cost implications early and continuously, systems can be designed to balance features, time-to-market, and efficiency. Development can focus on maintaining lean and efficient code. And operations can fine-tune resource usage and spending to maximize profitability.

Let’s break it down.

What engineering teams must do: Implement systems that make the cost-efficiency of cloud infrastructure equal to other engineering priorities from day one — just as they do with availability, security, compliance, etc.

Why they should do it: Because if they don’t, they risk business failure.

What it takes:

How CloudZero Helps

Consider cost implications early and continuously

What Vogels is talking about here is cost visibility: having easy, real-time access to data about what it costs to build and run your cloud infrastructure. As for who should be “considering” the cost implications, of course it’s important for both engineering and finance leaders to be aware of their costs, but we refer you back to the framework’s title — “The Frugal Architect” — to answer whose consideration is most important.

Translation: Engineers have to know and care about costs throughout the lifecycle of their cloud infrastructure. They need complete, real-time visibility into the costs most relevant to them, and they need an easy way for it to become a routine part of their workflows. Cost-efficiency is not a barrier to innovation — like security and scalability, it’s key to building great software.

CloudZero is the single best platform for considering the cost implications of cloud infrastructure.

We ingest 100% of your cloud, PaaS, and SaaS data (including up to five years of historical data), normalize it in a common data model, and allocate it in a framework that mirrors your business structure. However you want to drive cost accountability, we can design custom engineer- and team-level views for it.

How do we do it? A combination of AnyCost™ (data ingestion and normalization), CostFormation® (cost allocation and attribution), and an intuitive platform, centering around CloudZero Explorer. What your engineers get: relevant, real-time data, easily accessible in a single pane of glass.

Read how cost per customer, cost per team, and cost per region enabled Hiya to maintain a -0.6% cloud spend growth rate as they scaled.

Design systems to balance features, time-to-market, and efficiency

Build as much differentiated software as you can, ship it as quickly as possible, and don’t worry about what it costs. That was the previous business model so many SaaS and companies followed. But there is a head truth to face for engineering teams and business leaders in the modern age of tech.

That doesn’t work anymore — certainly not for would-be Frugal Architects. Speed, functionality, and cost are three equal partners in the overarching quality of cloud infrastructure.

And at any given time, innovations in one of these three areas could be the most impactful thing to do — meaning, don’t lionize new functionality and vilify cost considerations. Leaps forward in cost-efficiency can be just as (if not more) impactful to a business as a cool new feature.

Or, take it from another one of CloudZero’s customers, Skyscanner, where Platform Engineering Lead Stuart Davidson said:

“By getting product owners to look at [CloudZero’s] charts, they’ll be able to make more impactful decisions. Reducing cost might have a more significant impact on our bottom line than launching a new product — or not. CloudZero helps us make those tradeoffs.”

Maintain lean and efficient code

The goal of cost-efficiency isn’t complete once code is shipped. This comment refers to the ongoing management of costs: ensuring that code stays cost-efficient throughout its lifecycle.

Once end-users start engaging with a product or feature, your engineers will get a whole new view of how cost-efficient it really is — and, if necessary, how to refactor in a nuanced, impactful way.

There’s an example of this famous within CloudZero of one customer who had unwittingly set up a system to pull data once an hour, meaning to pull it once a day.

Once their customers started using the system, the customer’s cloud costs skyrocketed — which they could see instantaneously, thanks to CloudZero. What would have cost this customer $3M–$4M was curtailed to the tens of thousands.

Fine-tune resource usage and spending

This is where we get into the realm of cloud cost that many are already familiar with: actions like rightsizing, getting reservation discounts, and purchasing savings plans. There are some automated platforms that are best-in-class options for the resource provisioning side of things, like ProsperOps, a CloudZero partner, and the space’s most sophisticated Reserved Instance (RI) and Savings Plan (SP) provisioner.

Read our joint case study with ProsperOps, about how Drift used both platforms to reduce cloud costs by $2.4M and improve their Effective Savings Rate (ESR) to 41.2% (96th percentile).

There are also ways for operations teams to take this into their own hands. CloudZero Analytics also includes standard dashboards to give you one-click access to data around your AWS reservation coverage, AWS reservation catalog, and EC2 usage.

Maximize profitability

Maximize profitability: the Holy Grail of cloud cost management. It’s fed by every other task — fine-tuning resource usage, managing cost anomalies as they occur, understanding how your costs break down by business unit, etc. And there are ways that highly effective cloud cost management can help you not just reduce your costs, but increase your top-line revenue.

For example, understanding how your costs break down between different customer segments (e.g., SMBs versus enterprise customers) can help you fine-tune your pricing and packaging to improve overall revenue. Take it from SmartBear, another CloudZero customer:

“[Cost per customer] allowed us to work with our product marketing team on how to continue to package our products in a way that so our customers always receive maximum value, while also supporting our business model … [helping] us raise revenues without using additional engineering resources.”

The Joy Of Frugality

Dan Sabath, from Hiya, specifically called out how CloudZero helps his team distinguish “cheap” from “frugal.” “Cheap” means spending as little as possible; “frugal” means maximizing the return on every cloud dollar you invest.

There’s much more to the Frugal Architect framework, and there’s much more we have to say on the subject. Stay tuned for six(!) more exciting new articles in this series.

Author: Dustin Lowman

Dustin Lowman, a FinOps certified practitioner, takes no small pleasure in applying his English major’s sensibility to the SaaS world. Dustin also writes, performs, and records original music, and has never met a cardigan he didn’t like.