How ResponseTap Improved Predictability While Democratizing Cloud Cost Data To Engineering Teams

The Challenge

Since its inception in 2007, the ResponseTap engineering team has worked diligently to deliver new features to market. With a robust set of integrations, advanced analytics, and unique features that rely on AI and machine learning — they use AWS to build and deliver their products. Like any data-heavy software company, their cloud bills are a top driver of cost.

In order to deliver products that simultaneously delight their customers and support their business model, they needed a way to gain better visibility into their cloud cost — so they could ensure they were maximizing profitability of their products.

This was particularly important because the team was focused on a migration project. Greg Farrow, Principal Technical Architect, led the effort — and knew they needed to ensure they were refactoring each application to take full advantage of the efficiency AWS offers.

“We were in the middle of a big project to take a lot of functions out of our data centers and put them into the cloud. We really needed to know how our bill would change each month as a result of our work. I spent many long hours trying to create predictions and projections about what that might look like, but it was only when we actually did the work that we would find out.”

They set out to find a solution that could help them understand, manage, and predict their AWS cost. They knew in order to achieve this, they first needed something that would help them to tie cost to key business metrics.

“We wanted something that would show us if we increase our traffic 10%, will our costs also increase 10%,” Greg explained. “It’s never that simple, but we knew we could be more clever about how we did those projections if we understood the cost of running different aspects of our products or how much it costs us to support each customer.”

The Solution

The ResponseTap team implemented CloudZero, a cloud cost intelligence platform that maps cloud spend to business metrics, while putting engineering in control.

First, CloudZero helped them automatically group their costs into features — all without extensive manual tagging — followed by cost per tenant.

With engineering-friendly cost data that’s easy to access and explore, CloudZero provides important visibility to every engineer, so they can ensure they are building efficiently — whether they’re writing new software or refactoring applications to move to the cloud. CloudZero sends automatic updates and anomaly alerts to developer Slack channels to keep them updated on changes to spend by product.

Today, CloudZero helps them understand everything from how their most granular AWS costs map to their architecture — to top-line trends.

“When you’re just looking at billing data in AWS, you only have the choice of looking at your invoice from a 10,000-foot view or a grass-roots level — with nothing in between to give you any context. As we grew our team, this was even more difficult for anyone who didn’t have historical knowledge of our architecture.”

The Results

Connected the dots between products and cloud costs — while reducing manual effort

Prior to using CloudZero, Greg and his team were reaching the limits of the free tools that were available to them. Because of this, pulling together predictions took two weeks of effort — only to have the static data become outdated almost immediately.

Greg explained, “When you’re just looking at billing data in AWS, you only have the choice of looking at your invoice from a 10,000-foot view or a grass-roots level — with nothing in between to give you any context. As we grew our team, this was even more difficult for anyone who didn’t have historical knowledge of our architecture.”

With CloudZero’s simple and intuitive platform, engineers can now easily explore cost.

“CloudZero helps us connect the dots between our products and our spend — and zoom in and out with very little effort.”

Identified unallocated resources — and reduced overall AWS spend by 18%

ResponseTap has also been able to ensure that their spend is only being invested in their products — not excess resources. This started by inventorying and cleaning up their environment.

“One of the first things CloudZero helped us do is identify things that weren’t properly tagged. We were able to either delete or switch things off — or tag what we wanted to keep so we could understand those costs moving forward.”

Looking at cost by feature, instead of just AWS service, has also been revelatory.

“We can look at different features and cost groups and see that a certain micro-service is costing comparatively more than others — so it’s probably doing a lot more work. Then we can figure out it is so inefficient and adjust them.”

Over the past twelve months, they’ve saved 18% on their total bill.

Improved cost projections and eliminated billing surprises

As a growing company, they knew a growing cloud bill was healthy — but without the ability to tie it back to product features and customer utilization, it was challenging to predict how their spend would change.

“There was a lot of concern, especially from our finance team about how unpredictable our cloud costs were. Our invoice could go from increasing 50% one month then back again the next without any notice.”

With CloudZero, the ResponseTap team has been able to improve how they budget for and project costs — while avoiding surprises.

“CloudZero has helped to alleviate concerns about the predictability of our cloud costs. Our CFO has been aware of our bills and he’s very pleased. There haven’t been any awkward conversations since, because we’ve been able to keep everything very well understood.”

Improved cost confidence as they adopt new AWS services

This new visibility has also helped ResponseTap to validate cost as they build — and has improved their ability to understand their spend as they adopt new AWS services for the first time.

“When we start projects, we can closely monitor the cost to make sure that they are what we expected them to be —and we can react quickly if they’re not,” said Greg. “If we’re building a new service, we can see quite clearly in CloudZero how our costs are affected as soon as it starts to take traffic.”

This also has improved their confidence when adopting new AWS services.

Maximizing margins on every customer segment

As a data-heavy company, cost can vary significantly depending on each customer’s utilization of ResponseTap’s product. Now, not only can they now measure the cost to support each of their large enterprise customers, but they can compare the cost of different segments.

“One area where we’re going to be able to be much more insightful is our smaller customers,” described Greg, “We can see that a group of customers in a certain vertical tend to be really profitable even though they’re small — while another vertical who we may bill for a similar amount costs actually costs us more.”

Additionally, understanding costs of different aspects of their architecture can inform their tiered pricing model, which offers different packages based on metrics like number of phone calls. They can track the cost of metrics they charge for, while being especially careful to control the costs of aspects they don’t charge for.

Democratized cloud cost to engineering teams

While ResponseTap had set out to improve predictability, one of the most noticeable transformations has been their engineering culture. By providing relevant cost data to engineers about the products and features they are working on, engineers have started to incorporate cost as a data point throughout the entire software development lifecycle.

“Cost was really hard to make sense of before. While the team wasn’t deliberately building things to be inefficient, they didn’t have data to help them,” Greg explained, “With CloudZero in place, cost data has really been democratized across our team. We’re seeing the developers themselves are starting to raise questions about costs during planning — without having to come from a manager or an architect or the finance team.”

Not only have their costs become more predictable, but they’ve also minimized disruption and unexpected costs.

“With any sort of software development, the earlier you think about things and solve problems, the cheaper it is to solve those problems. If we try to make something cheaper to run once we’ve already built it, it’s a really expensive process. Whereas, if we’re thinking about that from the start, it’s baked in straight away and it’s much cheaper for us to do.”

Building a future with CloudZero

As ResponseTap continues to innovate on AWS, Greg and his team will continue using CloudZero to help them scale efficiently.

“CloudZero just does exactly what it’s meant to do. It solved a problem that we knew we had that no other tool seemed to be able to solve for us — and it’s proven to be useful ever since. It has continued to save us significant costs month after month.”