Proactively manage your IaaS & PaaS investments with a standard IT cost model
OverviewEnterprise use of public cloud services has made managing IT costs more complicated than ever. Infrastructure & Operations (I&O) leaders need to track, analyze, and manage not only traditional infrastructure and applications but also the company’s usage and cost of public cloud services such as Amazon Web Services (AWS).
Adding to the complexity of hybrid IT cost management, different parts of an organization require different views of cloud cost and usage data. CFOs and Corporate Finance organizations typically look at costs from the corporate reporting perspective of cost centers while CIOs, IT Finance, and I&O leaders need granular views of cost by projects, applications, services, and resource types such as compute, storage, and network. IT leaders depend on this context to accelerate better technology investment decisions.
AWS offers hundreds of cloud services billed per-second, generating millions of billing line items each month, complicating management of IT costs. To solve these challenges, IT needs a standard solution that incorporates costs based on cloud usage with on-premises IT costs for an integrated view of today’s hybrid IT business.
IT needs a standard solution that incorporates costs based on cloud usage with on-premises IT costs for an integrated view of today’s hybrid IT business
Using AWS, Azure, and GCP tagging to
TRACK BUSINESS VALUE OF CLOUD SPEND
2 | © 2018 Apptio, Inc. All rights reserved. apptio.com
Using AWS, Azure, and GCP tagging to track business value of cloud spend
Integrating public cloud into a standard IT cost modelProduct configuration flexibility is great for users, but creates new challenges for IT management. When AWS and Azure generate monthly bills, each resource yields dozens or hundreds of distinct billing line items. All of this fidelity is bundled under a single invoice that the finance department pays each month, but the granularity and meaning is typically lost in cost reporting to IT and business leaders.
To understand cloud spend in the context of the enterprise technology business, IT needs both a unified model for categorizing cloud and non-cloud costs together, and automation to map millions of billing line items into the IT cost model each month. Without it, there is no management view of how much cloud spend is going to storage vs. compute vs. network, how much of the enterprise’s total compute spend is driven by public cloud vs. traditional models, or how public cloud is impacting the costs of projects, applications, and services that the business consumes.
Apptio is the only solution that automatically maps cloud costs to an industry-standard framework of hybrid IT services spanning both public cloud and on-premises resources.
Based on the Apptio TBM Unified Model® (ATUM®), this mapping is embedded into Apptio® Cloud Business Management as part of an end-to-end solution for ingesting billing detail, categorizing costs, modeling fully-loaded costs including internal labor, and providing self-service analytics on how cloud impacts broader hybrid IT costs. This allows you to:
• Analyze multiple cloud providers using a common taxonomy
• Make apples-to-apples comparisons between cloud and on-premises delivery models
• Identify opportunities to optimize by reserving instances or downsizing overprovisioned workloads
Business Units or Business Capabilities
Business Unit or Business Capability
Business Unit or Business Capability
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Data Center
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Application
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Security & Compliance
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Delivery Services Platform Services Infrastructure Services Emerging
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Figure 1: The TBM taxonomy provides a standard set of categories for costs and other metrics
Platform
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Using AWS, Azure, and GCP tagging to track business value of cloud spend
Adding business context A key strategy for improving public Cloud Business Management by both IT and its business partners is to put cost into the context where key decisions are made, including application, project, and business unit consumption. To do so, Apptio Cloud Business Management leverages the linked accounts and tagging capabilities provided by AWS and Microsoft Azure.
Business context with linked accountsAWS, Microsoft Azure, and Google Cloud Platform provide access to their products and services through individual accounts, each with its own credentials and the ability to purchase and manage services. Many enterprises have many accounts at the team and departmental levels (whether they know it or not). These can be spread throughout application development, projects, IT infrastructure, and business units. This decentralization fosters agility, but left unmanaged, this fragmentation of unlinked accounts creates blind spots in cost and operational management, as well as increasing costs by missing out on discounts for aggregate consumption volumes.
Figure 2: Apptio Cloud Business Management provides analysis of public cloud broken out by product (per the service mapping), by customer (linked account owners), and by provider.
To gain the benefits of central visibility while preserving the benefits of decentralized agility, enterprises can link individual accounts into one “master account” paid through an IT cost center. The linkage between individual accounts enables Apptio to pull in all usage and costs for the enterprise, while using the owner of each individual account (e.g. an application team or business unit) as a way to analyze cost “by customer” in self-service analytics. And, it can qualify enterprises for deeper volume discounts. Using a linked account paid by IT brings cloud spend out of the shadows while still enabling local departmental, team, or business unit agility.
For workloads with infrastructures that do not need to share resources, individual AWS accounts can be used to group usage by workload or project. This can be accomplished by establishing individual AWS accounts for each workload and mapping them directly to your enterprise organizational structure.
Business context with tagging Tagging in a public cloud environment is a vital way to embed critical business context into cloud workloads.
Without tagging information, cloud provider bills will only include information about the provider services and potentially the accounts responsible for deploying the resources.
With tagging information, you can get more descriptive information about the resources—the application consuming that resource, the environment supported by the resource, and the individual who owns the resource are all examples of information that is generally associated with resource tags.
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Using AWS, Azure, and GCP tagging to track business value of cloud spend
Tags do not have any semantic meanings and are interpreted strictly as a string of characters. There is a maximum of 50 tags per AWS resource; Azure has a limit of 15 tags per resource; GCP has a maximum of 64 tags per resource. Tags are made up of “keys” (AWS) “names” (Microsoft Azure), and “labels” (GCP) paired with a “value.” AWS allows up to 10 keys for each resource and each key can have unlimited values enabling very detailed grouping of resources.
A five-phase approach for taggingFor organizations that lack a coordinated approach to tagging today, here is a five-phase approach to get started:
Phase 1: Define objectivesPhase 2: Define scopePhase 3: Define tagsPhase 4: Implement tagsPhase 5: Adjust for optimization
Limitations with taggingAs an enterprise expands its public cloud footprint, it will eventually reach limitations to a manual approach for managing individual accounts and tagging—the setup process for each AWS or Azure account is onerous.
When using tags beyond application and project names, a tagging schema needs to be created and controlled. Mistakes in tagging can cause a resource to be unassociated to applications and projects in the cost model.
Some AWS and Azure resources cannot be tagged, requiring a different cost distribution scheme to be created and maintained to allocate those costs across the enterprise.
With limitations to account-based and tag-based grouping, the tracking methodology needs be aligned to the structure of the environment.
Where the resources are 100% dedicated to a specific workload, group by AWS or Azure account; tagging is ideal for environments where you need to share resources across multiple workloads.
Tagging with ApptioThe best method for tagging (directly creating tags or creating a single tag for connection via CMDB) may depend on your organizational standards, CMDB readiness, and other factors. But if you don’t have an obvious choice based on that, Apptio recommends the first option—applying all tags directly to the cloud resource, rather than depending on a CMDB to “glue” things together.
Apptio automatically downloads billing usage information directly from AWS and Microsoft Azure—with tagging information included on each billing line item. Apptio will include that tagging information when the bill is downloaded.
Apptio recommends mapping to the following resource tags. These tags provide I&O leaders with information they need to hold groups accountable for incorrect tagging.
• Organization (e.g., business unit, department)
• Application name
• Application category
• Application objective
• Environment
• Purpose
• Cost center (e.g., Cost center ID)
• System owner
• Project (e.g., business initiative)
Once all the tagging data is mapped correctly, tags will enable customers to correctly allocate cloud cost to the correct application, cost center, business unit, and more. These tags also allow for detailed analysis of cloud usage not available with provider billing data alone.
5 | © 2018 Apptio, Inc. All rights reserved. apptio.com
Using AWS, Azure, and GCP tagging to track business value of cloud spend
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Cloud Provider Billing Detail & Your Related Costs
Figure 3: Using data directly from AWS, Apptio Cloud Business Management aligns AWS EC2 costs into IT towers, services, and applications.
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Using AWS, Azure, and GCP tagging to track business value of cloud spend
What makes tagging with Apptio different Works with messy, fragmented tagsApptio’s world-class data management platform uses business rules to accommodate misspellings and disparate tagging schemes. Start with what you have and improve over time.
Retroactively models resource costsApptio’s cost model tracks costs for every cloud asset that appears in a bill, tagged or not. When you add tags to a resource, our model automatically recalculates all historic costs to reflect the information in the new tags.
Govern tagging strategyWe provide reports that show the completeness and validity of tags so that IT leaders can measure progress and conformance of their tag rollout. Completeness is the % of non-blank tags. Validity is the % of tags conforming to a list of valid values.
Get startedApptio (NASDAQ: APTI) is the business management system of record for hybrid IT. Learn more or get started at apptio.com.
Cloud Business Management®
Figure 4: Aligning cloud spend to valid tagging values flags point-in-time and trending data quality.
Understand, manage, and optimize your public cloud spend with ApptioApptio Cloud Business Management is designed to give you an understanding of your entire cloud spending so you and your teams can make better decisions and optimize how you are buying and using cloud services.
Key benefits of Apptio Cloud Business Management:
• Understand cloud cost and usage across AWS, Azure, and GCP with cloud billing auto-mapped to standard IT service categories (ATUM) like Compute, Storage, and Database
• Fully burden cloud costs with labor, security, and other costs for allocations that help drive accountability for apps and BUs driving consumption (ATUM)
• Make good decisions and forecast variable spend with real-time monitoring, reporting, and analysis of spend and consumption tagged by infra, app, and business unit
• Drive optimization and accountability by identifying underutilized and idle cloud instances, including reserved instances
• Quick time to value using self-service setup to configure in minutes using only your AWS, Azure, and GCP credentials
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