First: Gain market share through client-driven product innovation
“We’re continuing to evolve and as a small company we need to focus on quickly shifting to meet the needs of our clients in an ever-changing market,” explained Amber Johnson, senior product manager at Exactuals.
Over the last year, the company has been in super-growth mode. “As we were expanding market outreach we had to ensure our infrastructure could support that growth in scale,” Amber said. The company had several expansion initiatives running in parallel, including the launch of an agreement to enable an automated, web-based residual payment process for the performers union SAG-AFTRA.
(Exactuals has been working with HATech for three and a half years. We’ve completed a number of projects with them, including, recently, implementation of a serverless strategy on AWS that allows PaymentHub to scale almost instantly, at the same time supporting a complex and highly secure user registration process. Get the case study here.)
“Once we completed those initiatives,” Amber said, “we had the opportunity to slow down a bit and look at our cloud environment and think about where we could rationalize our expenditures.” That’s when Exactuals sat down and revisited the cloud optimization recommendations we had made earlier this year.
Then: Identify and leverage cost savings opportunities
“Cost savings is a long-term initiative,” explained Exactuals CFO Andrew Mauritzen. “To ensure we are as lean as can be – that we continue down the path of fiscal responsibility.”
With more than 10% of the company’s total budget going to the cloud, that was an obvious first place to look for cost savings.
“HATech helped us take inventory of our AWS accounts and environments,” Amber explained. (This is our 13th Month Cloud Assessment & Optimization service.) “We did a deep dive into our usage, our development environments, how we’re running code through the SDLC and deployment pipeline. HATech helped us see where we could reduce the number of environments we were running to get cost efficiencies without negatively impacting performance or scalability.”
And then we executed on those recommendations – in just two days.
Cost savings opportunities HATech identified and helped Exactuals realize
Always: Balance risk and rewardOne of our chief goals in the cloud assessment and optimization is to ensure visibility into the risk/reward tradeoff associated with any decision. “Of course, we don’t want to become too lean too fast,” Amber said, “without understanding the impact of those decisions on the business and our ability to grow.” That’s why we started the cloud optimization exercise with a proof of concept on a few of Exactuals’ environments, so we could gather the data to accurately assess the risk and the reward. Amber explained, “HATech provided us with the usage analytics and next steps suggestions so we were able to formulate a plan to ensure optimal risk/reward moving forward.”
Significant savings that can be redeployedAcross the three categories of opportunity (deprecation, scheduling, ensuring flexibility), Exactuals was able to reduce their monthly cloud expenditures by more than 35%. Given that they had been spending more than 10% of their total budget on the cloud, savings of more than 35% makes a significant difference – enabling spending in other areas to speed up innovation. “As a software company owned by a bank, we’re in a unique position,” explained Andrew (the CFO). “While we’re still tiny relative to Royal Bank of Canada on whole, we are growing and there is more focus on us. We have the typical startup’s P&L, but we are looking to continue to scale, which costs money. The huge savings we realized on our cloud spend makes the conversation much easier when I go to the bank and ask for, say, eight additional developers. Being able to redeploy the savings rather than ask for net new resources gives me leverage in that conversation.”
What’s next: A better way to payThere’s a fourth category of opportunity for Exactuals to reduce cloud expenditures: by moving from on-demand capacity to reserved and spot capacity. For a startup in its early days in the cloud, on-demand capacity makes sense because it’s the most flexible. But it’s also the most expensive, so an important cloud optimization step as the organization matures is to move (to the extent possible) to reserved and spot capacity, with on-demand instances a fallback option for spikes in demand. While spot instances are the cheapest way to buy capacity in the cloud, the mere mention of them used to strike fear in the hearts of IT leaders, who worried that relying on spot instances could risk application availability. But new tools enable companies to leverage spot instances – and reap the huge associated cost savings – without risking application downtime. Spotinst, for example, predicts when a cloud provider is going to take back a spot instance and then automatically spins up a new instance and moves everything over.
The end goal: To deliver value
Like any business expense, the money an organization spends in the cloud – whether that organization is a fast-growing startup or a huge multinational – should directly tie back to value to the business. Cloud optimization is about finding the areas (everyone has them) where cloud spend and value are misaligned. In Exactuals’ case, it’s those four areas where some relatively small changes can enable the same level (or even better) performance and flexibility, while dramatically reducing costs.
With those savings, Andrew, Amber, and the rest of the Exactuals team can continue to deliver amazing innovations to their customers. And the company can continue to grow.