ELAs are forever

Scheduled Meeting of IT senior management, 8 AM, Jan 8, 2016

CIO: Thanks for coming everyone. I have an important announcement. We are going 100% Cloud. I would like everyone to figure out how to get there in next 18 months.

VP, Server Management: But, we own all this hardware

CIO: We will deprovision them. Listen, I know your real worry is about your employees. I have allocated budget to retrain them all to be DevOps. We will not have any staff cuts, in fact, your staff will have even more critical role to play.

VP, Data Management: But, we have so much data — data gravity might bite us.

CIO: Our pilot team has chosen AWS as the best fit Cloud provider for us. AWS provides Snowball, which allows us transfer rapid amounts of data to them.

VP, App Dev: But, we use app servers.

CIO: Listen, we have no choice, but to rearchitect our apps to be micro services based. If we want to survive in this market, we need agility and I am convinced that rewriting our apps to be micro services based is worth the investment. We will have budget to modernize our applications.

I am forming a team to help identify best practices to adopt Cloud in our organization. We are also getting an economist from finance team to optimize the cloud costs for us. We want to be the best in the business and also optimize our spend. This team has exactly 60 days to come back with recommendations. I would like each of you to give your most talented person to this team. I will lead this team.

Team: sounds good.

Scheduled Meeting of IT senior management, 8 AM, Mar 31, 2016

CIO: Thank you for coming everyone. We are here to discuss the recommendations of the Cloud team. Our transition to Cloud is not easy, we have hurdles, but we have not identified any significant hurdles.

We will offer AWS training to all our IT staff. We will also pay for the cost of certification. Our IT staff will become among the best in the industry and we are also enabling them to have a stellar career. Now for the details.

Cloud team: ………
…Cloud Native…DevOps….Blameless Postmortems….REST APIs….Templates……Formation…..Containers…….Opensource…..IAM…..
……………

……Micro Services………….A Cloud Guru……..Certification…….

Cloud team Economist: We expect not exceeding our budgets. We have done a careful analysis and think we can use Reserved Instances that will offer us huge discount. To be cautious, we will buy a 1 yr Reserved Instances.

VP, Server Management: What are Reserved Instances?

Economist: Well, these are really the next best thing since slice bread. You see lot of people use on demand instances and over pay. Reserved Instances can help us cut down the prices by up to 40%.

CIO: I feel so good not having to sign ELAs with these legacy vendors that lock me in for 3 yrs. While, I enjoy the steak dinners, I hate it whenever that legacy vendor sales guy shows up in his new Maserati and parks it next to my beat up Subaru.

VP, App Dev: Maserati is cool. Btw, doesn’t our CFO prefer a mix of OPEX and CAPEX — looks like we will be increasing our OPEX?

Economist: Actually, we can balance OPEX and CAPEX. We will buy pre-paid Reserved Instances, which can be CAPEX.

VP, Data Management: You can do that?

Economist: Yes, its pretty flexible.

Emergency Meeting of IT senior management, 7 PM, Jul 15, 2016

VP, App Dev: The app is not performing well because our default instances don’t have enough CPU power.

VP, Data Management: The RDS instance we have isn’t doing too well under this load.

CIO ( & Lead, Cloud team): You guys need to take micro services seriously. I see lot of your staff just moving existing stuff to Cloud. In fact, I saw someone talking in the cafeteria how great this lift & shift is.

VP, App Dev: Yes, we are rewriting to be Cloud Native and using micro services. But, for the sake of time, some apps we are using a lift & shift approach.

VP, Data Management: Same here — we will optimize the queries, but right now, we don’t want to cause too much disruption.

CIO: This is why Cloud is so great, no worries, we can bump up our instance types, instead of default 2 vCPUs, you can now have 4 vCPUs. For RDS, lets make r3.xlarge as our default instances instead of r3.large.

Economist: But, that will increase our costs.

CIO: Sure, we have to pay bit more for upgraded instances.

Economist: No, we have to pay double.

CIO: How so?

Economist: Well, remember we pre-paid for instances, which we won’t use anymore. We now have to buy beefier instances and pay for them.
CIO: What? Can’t we just change the instance types?
Economist: No sir.

CIO: That can’t be true, even my Oracle sales guy used to give me credit for stuff I didnt use. You are telling me that if we don’t use Reserved Instances, we have to pay for them?

Economist: Yes

CIO: Can’t we call AWS?

Cloud Team member: We already did. We don’t qualify for Reserved Instance change. Its only supported for Linux instances, we use Windows instances.

CIO: Ok, lessons learned. Lets eat the cost and to be safe lets go one instance beefier than what we need.

Economist: Ok, sir.

Scheduled Meeting of IT senior management, 4 PM, Nov 1, 2016

CIO: How are things?
VP, App Dev: Things are good, we changed many of our apps. We are now barely using the CPUs we have.

VP, Data Management: We optimized our queries, we don’t need r3.xlarge instances, we can use t2.medium they just announced

CIO: Sweet, lets scale down our instances and show cost savings. Man, CFO is going to have to buy me a steak dinner.

Economist: No sir, we can’t

CIO: Why not?

Economist: Well sir, remember, we pre-paid for these beefier instances in July? We did a 3 year term to reduce our costs.

CIO: so?

Economist: We owe AWS that money till the end of 3 years. We can’t cancel them

CIO: WTF?

Economist: Yes, sir — the bad news is that we are way over budget.

30 minutes later:

On the highway, CIO in his car screaming: WTF? WTF? WTF? WTF?

60 minutes later:

At home, CIO: You know why we can’t have nice things in this world?

CIO’s spouse: why?

CIO: Because we can never get away from ELAs. AWS has renamed ELAs to Reserved Instances and screwed us. I thought Amazon was customer obsessed.
Spouse: Honey, all businesses are profit obsessed.

CIO: I know, I wish there is a provider that just gives me discounts because I use something more and not need me to sign these 1 year or 3 year agreements. Something like an Elastic Cloud.

Notes:

• I know that AWS will help you cancel your Reserved Instances in some cases. This fictional scenario is realistic companies that don’t have a crystal ball for capacity planning.
• Depending on your luck, you may be able to sell the RIs on the market place, some have had success, others report it as being a ghost town
• Your luck to sell RI will increase if you are in US-East region
• If you are starting now, strongly consider using AWS Lambda, whose pricing model is lot more elastic