Cloud Automation Ratio to improve Operations and Application Profitability

It’s a fact that complexity in cloud operations is only increasing, to tackle this complexity and get accurate visibility into automatable Cloud Operations, I have created a ratio coined the “Cloud Automation Ratio” that achieves both the above objectives.

This ratio is born from both my customer conversations, and our discussions within the MIT Sloan program on usage of Financial Ratios to help manage a large business. For example in business we use Liquidity Ratios such as the Quick Ratio to measure the ability to pay short-term debts using the most liquid assets. We use a similar ratio construct to accurately track automatable Cloud Operations and pay down the technical debt carried in those operations; ultimately helping the unit economics of applications running in the cloud.

????????????????????????????????????????????????????????????Automated Cloud Operations

Cloud Automation Ratio == -------------------------------------------------

????????????????????????????????????????????????????????????Automatable Cloud Operations

Frequently cloud platforms are automated in discreet units that are mutually exclusive but provide a collectively aggregate service to operators, developers and end users. Often these are assembled with a Continuous Integration and Continuous Delivery (CICD) platform such as Jenkins. The discreet areas of the cloud represent the “Automated Operations” portion of the above ratio. Whereas the aggregate operations above represent the “Automatable Operations” portion of the ratio.

A Cloud Automation Ratio of 1 is an ideal scenario, which will mostly never happen in a real-world operating environment. The real aim is to first establish the ratio for visibility, and track it closer to 1 as operations are automated. Similar to how companies can align operations to improve their quick ratio, Cloud operations and automation teams can collaborate to achieve a ratio as close to 1 as possible. Providing executive leadership a metric that summarizes details, while also showing progress towards improving efficiency, reducing costs, and increasing reliability of the Cloud and ultimately the applications hosted within it.

To build an initial reading of the Cloud Automation Ratio, here is a stepwise algorithm I recommend, your milage may vary and you will have to adopt it to your specific operational and security/compliance needs. ?Though the ratio won’t be static, due to the change in both the denominator and the numerator, the true value is from tracking the ratio over multiple cycles.

1: Identification:

???????????The first step in measuring what is automatable is to identify both the tasks that are presently automated in parts and also manual tasks that are currently being performed in your cloud environment. This includes tasks such as provisioning resources, configuring network settings, deploying applications, reconfiguration for security, capacity and placement based on capacity and monitoring system performance. These tasks should form a full list of operations done by the team, and summed together can be the denominator for the Cloud Automation Ratio. ?

2: Evaluation:

Once you have identified the operations tasks, evaluate how frequently they are performed and how complex they are. Tasks that are performed frequently and are relatively straightforward are good candidates for inclusion in the Cloud Automation Ratio, while tasks that require a high level of expertise may not be worth including as they impact the ratio adversely. Such tasks as more noise than signal. There is a possibility to also weigh each of the operations differently, since some tasks may be critical to the operation of your cloud environment and require a high level of expertise to execute correctly. If these tasks are not automated or done so incorrectly, they could have serious consequences for your business. Due to their impact on business health, it is possible to add a heavier weight to such operations.

3: Automation:

First develop an automation roadmap: Based on your assessment above develop a roadmap for automating your cloud environment. Start by prioritizing tasks that are low-risk and have a high frequency of occurrence. As you gain experience with automation, you can begin to tackle more complex and high-risk tasks, and so assess the impact of such automation on the Cloud Automation Ratio.

Second if your company has a set of standard automation platforms, utilize these first to automate the tasks you have identified in the above steps. Leverage existing automation; specifically each cloud provider offers built-in automation tools, such as AWS CloudFormation or Azure Resource Manager, that can be used to automate Day 0, Day 1, and Day 2 operations of resources. Similar capabilities exist for Private Cloud through VMware Aria Automation for example, combined with configuration management systems such as Salt, Ansible, Puppet. ?For Data automation and transformation leverage tools such as Apache Airflow which can help significantly with Data Pipeline automation. For AI automation use the emerging automation / orchestration platforms such as Langchain, LlamaIndex, or ChatGPT. There is some really interesting developments happening in this area of automation, specifically the automation of AI pipelines, which I will detail in another blog post.

4: Assessment:

???????????Using an Operations reporting platform develop a dashboard to track the automated operations that can be automated. Platforms such as Datadog and Aria Operations can be leveraged here, since not only can they provide a summary for Cloud Automation Ratio, but also deep visibility into the full-stack of the cloud that operations occur upon. These dashboards need to be defined, discussed, refined on a daily basis initially with the operations and automation team. A recurring monthly read out should be completed with supporting executive teams, and a roadshow performed internally to help market and socialize the details and success delivered by the Cloud Automation Ratio tracking.

5: Recursion:

Go back to step 1 in the process.

In conclusion, measuring what is automatable in your cloud environment requires a thorough assessment of tasks, frequency, complexity, risk, impact, and existing automation tools and operations processes. By building a Cloud Automation Ratio, you can directly correlate what is possible to automate, how much as been automated, it’s impact on cost of operations, direct impact to the Cost Of Operations report; ultimately delivering a positive impact on profitability via the Balance Sheet and making cloud operations less complex at large scale.

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Note: The views expressed above are my own, not of my employer or customers / partners in the cloud ecosystem.