Cloud Expense Management
Anders Mikkelsen
Helping CIOs Save Up to 50% on Voice & Data Costs, Fueling Innovation While Enhancing Budget Visibility and Control
Overview:
Our Cloud Expense Management service finds and executes savings in cloud spending for AWS and Microsoft.
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Our service will:
·??????Collect Billing Data
·??????Identify Savings Opportunities
·??????Review Savings with you the Client
·??????Execute Savings for you the Client
·??????Report Savings to you the Client
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Potential savings are typically around 50% in AWS and 30 to 40% in Azure. We help organizations with $100,000 annual budgets for AWS and Microsoft Azure.
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AWS
We provide a complementary study showing savings opportunities to qualified clients.
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When the client wants to capture the savings, the client can then commit to one year and we will execute on the cost savings opportunities, leveraging the automation tools and our experts on staff.
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The big opportunities tend to be consumption focused, e.g.
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It usually takes 60 days to save an amount equal to 20% of the identified savings, and around 6 months to execute 100% of the identified savings. (It takes time to get clients to review and approve all the savings action items.)
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The second 6 months is spent doing ongoing cost management. Our team will be monitoring all the ongoing changes in the environment. (Weekly updates if baseline spending is $1M a year. Smaller environments usually need attention only every quarter.)
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Our fee is based on success and a share of the savings.
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Renewals:
Retention of clients is 100% so far with this service. The renewal fee is typically 60% to 70% of the initial fee. The client renew the service because they want access to the automation tools and help executing cost savings, and a steady stream of cost optimization recommendations. In the lead up to renewal they will have received regular cost optimization recommendations, as AWS spending and environments are dynamic.
Fees only go up if a client environment grows dramatically in size, i.e. 25% or more growth.
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Payment and Savings Timeline:
When the contract is signed our team starts executing on saving money immediately.
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It usually takes 60 days to save an amount equal to 20% of the identified savings, and around 6 months to execute 100% of the identified savings. (It takes time to get clients to review and approve all the savings action items.)
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Our team will be monitoring all the ongoing changes in the environment, and will discover additional cost savings over the first year of the service.
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Microsoft Azure
Initial Assessment:
Client will answer a series of questions. We will use this to identify areas to focus on for savings. The client will receive a free consultation to discuss the top areas where they can expect cost savings. We then present an opportunity for an in depth assessment with actionable cost savings.
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Paid Review:
The next step is an in depth assessment that is paid for by the client.
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Key areas that are investigated for savings include:
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We charge 10-15% of savings to do the assessment. Or $5K, whichever is greater. Customer signs this contract up front. There is a charge because the client can often take action on their own to implement the resulting cost savings proposals, also the assessment is not automated but done by experts.?
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The deliverable for the in depth assessment is a document where the client would see categories of savings improvement and specific actionable proposals. E.g. it might explain how the client is eligible for specific Windows licenses that would drive savings, specific servers that need to be right sized, or how going serverless can create savings.
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The client would have the option to execute the actionable savings themselves. However we can also execute the actionable savings for the client, using our team of experts.
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Payment for Execution:
In order to implement the savings identified for the client, that the client doesn’t want to implement, we will scope out how much each project costs to implement.
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We estimate that typically it costs using our team of experts around only $10,000 to $20,000 to save $60,000 a year. We will present to the client which savings will be recurring annually.
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For example a client has $500,000 in savings. The client pays 15% for the assessment with actionable items or $75,000. Implementation could cost the client 25% or $125,000, saving the client $300,000 a year after our fees, with a substantial quantity of recurring savings. (The types of savings vary by client, but it is plausible $300,000 to $400,000 of the $500,000 of recurring savings would apply two and three years or more in to the future.)
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Typically the cost savings are savings on infrastructure and can be done without extensive client effort or involvement of developers.
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There is a two week lead time for assessment scheduling.?