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Case Study: Reducing Cloud Spend by 70% 🚀

Introduction

In the rapidly evolving digital landscape, businesses are increasingly reliant on cloud technologies to drive efficiency, scalability, and innovation. However, the journey to cloud optimization is fraught with challenges, including overprovisioning, underutilization of resources, and a lack of strategic management, leading to inflated costs. This case study details the journey of a global B2C company with operations across multiple countries, which successfully reduced its cloud hosting costs by 70% through strategic rightsizing, consolidation, and optimization of its cloud infrastructure, ultimately reducing its server footprint from 81 to just 15 without sacrificing performance or capacity.

Background

The company, a leading B2C enterprise with a diverse portfolio of consumer services and a significant online presence, faced escalating cloud hosting expenses. Rapid expansion into new markets had necessitated a scale-up in cloud infrastructure. However, this expansion was executed without a cohesive strategy, leading to:

  1. Overprovisioned resources based on speculative demand rather than actual usage.

  2. A high number of idle or underutilized servers, including those forgotten after project completion or left by departed employees.

  3. Duplicated environments for testing and development, mimicking production environments in size and cost, irrespective of actual requirements.

  4. An overwhelming reliance on expensive, one-size-fits-all cloud solutions instead of tailored services.

These practices resulted in a complex, inefficient, and costly cloud environment, diverting valuable financial resources away from core business growth initiatives.

The Challenge

The primary challenge lay in the company’s scattered and unoptimized cloud infrastructure, which led to operational inefficiencies and prohibitive costs. The cloud setup included:

  1. 81 servers across various regions, many of which were underutilized or not used at all.

  2. Test environments that unnecessarily replicated production environments in scale and expense, regardless of actual testing needs.

  3. A lack of awareness or utilization of more cost-effective cloud services that could meet or exceed their operational requirements.

  4. The absence of a systematic approach to decommissioning or downsizing resources post-project completion or in response to changes in demand.

This sprawling infrastructure not only inflated costs but also complicated management and oversight, increasing the risk of security vulnerabilities and performance bottlenecks.

Strategic Approach and Implementation

A multifaceted strategy was devised and implemented to address these challenges, focusing on rightsizing, server consolidation, and service optimization. The approach included:

Rightsizing Resources

An exhaustive analysis of each workload’s requirements was conducted, leading to the adjustment of server sizes based on actual, measured usage rather than speculative or peak demand forecasting.

Server Consolidation

A significant consolidation effort reduced the company’s server footprint from 81 to 15. This was achieved by identifying and merging underutilized resources, and by adopting more efficient computing models such as containerization and serverless architectures where appropriate.

Shutdown of Unused Servers

Automated tools and policies were introduced to identify and shut down or decommission unused servers, particularly those that remained operational out of neglect or oversight.

Cloud Service Optimization

The company expanded its utilization of cloud services, moving away from a reliance on general-purpose compute instances to more specialized and cost-effective services. This included adopting managed database services, serverless computing platforms, and other PaaS (Platform as a Service) offerings that provided the necessary capabilities at a lower cost.

Testing Environment Optimization

The approach to managing test environments was overhauled. Test environments were scaled down significantly and configured to replicate production environments only during critical phases such as load testing. This rationalization resulted in substantial cost savings without compromising on the quality or thoroughness of testing.

Outcomes

The strategic optimization of the company’s cloud infrastructure led to transformative results:

  1. A 70% reduction in cloud hosting costs, liberating substantial financial resources for reinvestment in strategic growth areas.

  2. A streamlined server footprint from 81 servers to just 15, simplifying management and reducing the potential for security vulnerabilities.

  3. Enhanced operational efficiency, with a cloud environment now precisely tuned to the company’s actual needs.

  4. No loss in performance or capacity, ensuring that customer experience and service delivery remained unaffected by the consolidation and optimization efforts.

Conclusion

This case study exemplifies the critical importance of strategic cloud infrastructure management. By rightsizing, consolidating servers, optimizing cloud services, and refining testing environments, the global B2C company not only achieved significant cost savings but also enhanced its operational agility. This journey underscores a crucial lesson for businesses operating in the cloud: with thoughtful analysis and strategic management, it’s possible to dramatically reduce costs without compromising on performance or capacity, paving the way for sustainable growth and innovation.

 

Based in Burbank, California, Vimware is an Amazon AWS partner offering specialized IT strategy and software development consulting. With a focus on empowering small to midsize businesses, our expertise in building apps, websites, SAAS, APIs, and DevOps ensures your organization excels in the digital arena. Looking for more details or services? Contact us—we’re dedicated to providing the support you need!

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