How PE-Backed Companies Can Save Money on Their AWS Spend
Private equity-backed companies prioritize efficient spending to fuel growth and profitability. But navigating the complex cloud environment and its myriad services often presents a challenge in controlling costs.
A recent survey revealed that 70% of PE-backed firms are now more focused on cost management. Effective AWS cost optimization is essential for curtailing unnecessary expenses, smarter resource allocation, enhancing operational flexibility and propelling business growth. Cloud spend is usually the second-largest company expense, so informed AWS cost management and optimization are vital for achieving financial objectives.
Understand the AWS Cost Reduction Landscape
Companies have various options for reducing AWS costs and maximizing their cost savings. Let's take a closer look at some of the key strategies.
Reserved Instances (RIs)
Reserved Instances allow firms to reserve compute capacity on AWS for one to three years. By committing to a specific instance type and size, firms can benefit from significant discounts of up to 75% on their compute resources. RIs provide stability and predictability in pricing, making them an attractive option for firms with long-term commitments and steady workloads.
Spot Instances allow firms to leverage spare computing capacity at a significantly reduced cost. With discounts of up to 90%, Spot Instances are ideal for fault-tolerant workloads that can handle interruptions. PE-backed firms can use Spot Instances to optimize costs for non-critical workloads and achieve substantial savings.
AWS Savings Plans provide flexibility and cost savings for firms based on their commitment periods and spend levels. With Savings Plans, firms can benefit from discounts of up to 66% on their AWS usage. These plans cover various AWS services, including Amazon EC2, Fargate, and Lambda. Firms can tailor their Savings Plans to align with their specific usage patterns and optimize costs accordingly.
AWS offers volume discounts for certain services, such as AWS Data Transfer and Amazon S3, based on volume pricing tiers. Organizations can use these discounts by consolidating their usage and qualifying for lower pricing tiers. Firms can save significantly by optimizing their AWS usage and leveraging volume discounts.
Gain the Enterprise Discount Program Advantage
The AWS Enterprise Discount Program (EDP) allows companies to secure significant savings, harmonizing their cloud strategy with long-term growth ambitions. It offers attractive discounts on AWS services, tailored to a company's commitment over a one to five-year timeframe, based on pre-set spending and growth targets.
Although the EDP requires a long-term engagement and minimum spending levels, it ensures stable and predictable pricing. This predictability is crucial for firms to plan their AWS expenditures efficiently. Strategic use of the EDP streamlines AWS costs, amplifies savings and enhances resource allocation. This strategic approach empowers firms to expand their AWS use, bolstering long-term business growth and fostering innovation.
For optimal benefit, firms must align the EDP with their cloud strategy, usage trends and growth projections. Taking a thoughtful and strategic approach to the EDP can be a powerful way for businesses to thrive in a competitive market and fully leverage their cloud investments.
Leverage Savings Plans for Predictable Usage
For firms with predictable usage patterns, AWS Savings Plans offer a practical route to optimize spending and meet financial targets. These plans combine cost savings with flexibility, allowing firms to tailor their AWS expenditures to their unique needs.
AWS Savings Plans enable PE-backed firms to commit to a consistent usage level for one or three years, unlocking substantial cost reductions compared to on-demand pricing. Choosing the right plan lets firms align their usage and costs effectively.
Compute Savings Plans, offering up to a 66% discount, are highly flexible. They apply to Amazon EC2, Fargate and Lambda usage, and the discounts automatically cover various instance families, sizes, regions, operating systems and tenancies. This adaptability makes them suitable for companies with varied workloads and shifting resource demands.
EC2 Instance Savings Plans are more specific, providing discounts of up to 72%. They focus on particular instances of families within a chosen region. These plans automatically apply discounts within that region, irrespective of the instance size, operating system or tenancy, making them ideal for firms looking to optimize costs for particular instance families.
By committing to a fixed usage level for one or three years, firms can save costs and gain budget predictability. These plans allow for payment based on actual resource consumption, with the flexibility to adjust usage in line with business needs. This ensures firms don’t overspend on unused resources, leading to more efficient AWS spending.
Regular monitoring and adjustment of usage patterns are essential for portfolio companies to maximize their AWS Savings Plans. By closely analyzing usage and making informed forecasts, firms can achieve maximum cost efficiency and align their AWS spending with their strategic goals.
Optimize Reserved Instances for Cost Efficiency
Reserved Instances (RIs) present a strategic opportunity for PE-backed firms to optimize costs on AWS. Understanding the different RI types and utilizing Mission Cloud's Reserved Instance Optimization (RIO) program can significantly enhance the management and benefits of RIs.
RIs enable firms to reserve AWS compute capacity for one to three years, offering discounts of up to 75% compared to standard rates. By committing to specific instance types and usage volumes, firms gain cost savings and budget stability.
There are three RI types: Standard, Convertible and Scheduled. Standard RIs, ideal for stable, predictable workloads, provide up to 72% off on-demand prices, requiring commitment to certain instance types and sizes. Convertible RIs, though offering lower discounts of up to 54%, allow flexibility in modifying instance attributes and adapting to evolving business needs. Scheduled RIs cater to time-specific, predictable workloads, allowing firms to reserve capacity only when necessary and optimizing costs for specific time-bound needs.
Mission Cloud's RIO program is valuable for maximizing RI benefits, simplifying RI management and avoiding overcommitment or underutilization. The RIO program offers expert FinOps cloud analysts to identify cost-saving opportunities and fine-tune RI usage. This collaboration creates cost efficiencies, improves optimization levels and reduces costs while allowing firms to concentrate on core operations.
How Mission Cloud Can Help
Partnering with an experienced AWS consulting partner is crucial in navigating the complexities of cost optimization and maximizing the benefits of AWS. Mission Cloud brings extensive expertise in AWS cost optimization, providing valuable guidance and support to PE-backed firms. Here are some ways Mission Cloud's services can help.
Insights and Recommendations Based on Proven Expertise
Navigating the intricacies of AWS cost optimization requires in-depth knowledge and experience. As an AWS consulting partner, Mission Cloud has a track record of helping PE firms and their portfolio companies achieve significant cost savings and maximize their AWS investments. Mission Cloud’s deep understanding of AWS services and pricing models allows for expert guidance tailored to each firm’s needs and objectives.
Mission Cloud's team of seasoned FinOps analysts has deep expertise in AWS services and cost-management strategies. They employ sophisticated tools, including CloudHealth and AWS Cost Explorer, to conduct in-depth assessments of customers' AWS infrastructures. This thorough process enables the team to recommend rightsizing and modernization opportunities before using RIs and Savings Plans — and is especially valuable for reducing cost before entering into an EDP.
Customers working with Mission Cloud benefit from:
- Comprehensive evaluation: Mission Cloud conducts a comprehensive analysis of existing AWS usage patterns, identifying inefficiencies and potential cost-saving opportunities.
- Rightsizing recommendations: Mission Cloud provides precise recommendations for rightsizing resources. These include downsizing or upgrading instances, adjusting storage tiers or optimizing database configurations to match actual needs.
- Modernization strategies: The team evaluates modernization possibilities by recommending the adoption of newer AWS services, optimizing architectures for cost efficiency and guiding clients toward innovative solutions.
- Pre-EDP cost reduction: Mission Cloud focuses on reducing costs before entering an EDP. This approach helps customers optimize spending before committing to larger contracts.
For example, COMPLY, a leading compliance software provider, and K1, the company’s PE firm, were looking to address burgeoning AWS costs after acquiring three similar firms with varying AWS footprints. COMPLY partnered with Mission Cloud to secure a new AWS EDP and realize greater value across its investments.
After a comprehensive assessment of their AWS infrastructure and usage patterns, Mission Cloud renegotiated COMPLY’s EDP without a lapse in coverage, resulting in $460,000 in AWS savings in eight months. Plus, Mission Cloud’s RIO program saved time for COMPLY and allowed it to reinvest capital in other initiatives.
Access to Innovative Technology and Tailored Solutions
Mission Cloud's services go beyond cost optimization to include a comprehensive suite of solutions that help PE-backed firms architect, migrate, manage and optimize their AWS cloud infrastructure. By leveraging Mission Cloud's expertise, firms can streamline their operations, enhance performance and drive innovation while achieving cost savings.
Here are some key benefits companies can unlock:
- Cost efficiency: By rightsizing and modernizing before committing to RIs, Savings Plans or an EDP, clients can significantly reduce unnecessary costs while optimizing performance.
- Tailored solutions: Mission Cloud's recommendations are tailored to the unique requirements of each client, ensuring optimal resource utilization.
- Strategic planning: Customers benefit from a strategic road map that reduces immediate costs and sets the stage for long-term financial optimization and scalability.
- Expert guidance: Mission Cloud's experts provide ongoing support and guidance, ensuring continuous optimization in an ever-evolving AWS landscape.
Mission Cloud's proactive approach to rightsizing, modernization and cost reduction sets the stage for AWS customers to operate leaner, more efficient and cost-effective cloud infrastructures. By empowering clients to make informed decisions before committing to RIs, Savings Plans or an EDP, Mission Cloud helps businesses maximize the value of their AWS investments.
Work with Experts in PE and AWS
Partnering with Mission Cloud allows PE-backed firms to tap into a wealth of knowledge and experience in AWS cost optimization. Mission Cloud's team of certified experts can assess your current AWS usage, identify areas for improvement and implement strategies to optimize costs effectively, enabling you to make the right decisions and maximize the value of your investments.
With a 4.86 out of 5 customer satisfaction score and consecutively earning a Net Promoter Score of 80+ (twice the industry average), Mission Cloud can help you make your cloud environment a catalyst for long-term organizational growth and success.
Don’t waste valuable time for average results. Get in touch with Mission Cloud and learn how to reimagine cost management for PE-backed firms, optimize AWS spend and accelerate growth.