For today I’ll show you two major cost optimizations for your Azure Virtual Machines ;
- Reserved Instances
- Windows Licensing
As the baseline for the cost projections, I’ll be using a commonly used “D2v3”-machine (deployed in West Europe & currency set to Euro) ;
For the Cost Optimization calculations, I’ll be using VMchooser, which returns the following results ;
So what to make of this? Let’s dive into those two topics!
Continue reading “Azure Virtual Machines – Two major cost optimizations everyone should know!”
In my current role at Microsoft, I often talk about the possibilities in regards to application modernization. A typical ask in this space is to what kind of service they should use as a underlying platform for their own services. Where this commonly results in a (brief) discussion about VMs vs Containers vs Serverless/FaaS. Today’s post is about my personal take on the matter.
Setting the scene
First let’s start with setting the scene a bit… For today I’ll try to focus on the application modernization landscape, where the same goes for the data platform stack. Here you can pretty much interchange “Functions” with “Data Lake Analytics” and “Containers” with “HD Insights”. Though we’ll not go into that detail, in order to reduce the complexity of the post. 😉
When looking towards the spectum, the first thing to acknowledge is the difference in service models. Here we mainly have two service models in play ;
Continue reading “FaaS & Serverless – Vendor lock-in or not? Consider the cost of the full application lifecycle”
During the weekend I saw the following tweet passing by …
Apparently, a hosting company (allegedly) got all their data wiped by an ex-admin. Now I can imagine people thinking that this is something that is part of the territory when it boils down to cloud. So I wanted to write a blog post entailing what you do to set up a governance structure in Azure. Here I’m aware that the above tweet is more related to the security aspect of governance, it’s a part of it nevertheless.
Let’s get started on our scope… IT Governance can cover a lot of ground. In essence, the goal is to assure that the investment in IT generates business value and the risks that are associated with IT projects are mitigated. Though I found that CIO.com has a nice definition on it ;
Simply put, it’s putting structure around how organizations align IT strategy with business strategy, ensuring that companies stay on track to achieve their strategies and goals, and implementing good ways to measure IT’s performance. It makes sure that all stakeholders’ interests are taken into account and that processes provide measurable results. An IT governance framework should answer some key questions, such as how the IT department is functioning overall, what key metrics management needs and what return IT is giving back to the business from the investment it’s making.
So let’s take a look at how we can put an enterprise-grade structure around the management of Azure!
TL;DR = Azure Enterprise Scaffold
For those who want to skip the post below… When talking about governance in Azure, the best place that summarizes it the following page in our documentation ; “The Azure Enterprise Scaffold“.
Continue reading “Azure : IT Governance in the cloud”
When talking to customers about DevOps, I often get the two following questions ;
- Does this mean I have to get rid of ; ITIL / COBIT / … ?
- Do I have to start moving people around and creating new units?
The quick answer is ; No.
A typical parabel in any project methodology is ;
How do you eat an elephant? Take snack sized bites and work your way through it.
And the same goes for DevOps!
Continue reading “DevOps : What’s the impact on my ITIL/COBIT/… based shop?”
The Overall Process
- Study ; The first step… Consider what you want to achieve and what’s life currently like. This might seem as a no-brainer, though you might be surprised how few organisations actually do this.
- RFI ; So you have a great idea? Fantastic! Now compare this with what is currently seen as industry standards and what are common solutions positioned by vendors. My advice here is not to differ too much from the ongoing standards, unless this is really ground breaking or market differentiating for you. Though, in most cases, you are just looking to keep your business running. In the latter case, keep as close to the standard as possible.
- RFP/RFQ ; So we know what we want, and what is possible at this point in time by the market. Let’s select our vendors from who we wish a clear-cut proposal. We’ll go more in detail about this phase later on… So don’t worry. 🙂
- Project ; Once the selection is done and contract negotiations are (near) closed, the project can start. This usually starts with a due diligence by the vendor to check if the assumptions / constraints are still valid.
- Operations ; A lot of people think that operations stops during this project. The reality is far from it, and that’s actually common sense! We do projects to enhance our operational baseline, but the latter is a moving target. We cannot freeze our business for half a year! So be aware of this…
The first step before any project should be a “study”. Do a requirements analysis, update your views on the operational baseline and define the target flag of what you want to reach. Now you can do a fit-gap analysis and see what needs to be done. If the entire matter is way to big… Slice it into smaller / manageable chunks. In the past, we often saw “big bang”-projects which have shifted towards “Roadmaps”. In a Roadmap, the road towards the end goal is mapped via smaller / more realistic paths (projects). The conjunction of all these projects ensure that you reach your path. Though where it might be possible to enter all these projects into one RFP, in most cases it might be more interesting to spread them as your operational baseline is (with due reason!) a moving target.
Your job is mostly focussed to serving your internal business processes. It is not wrong to say that you are not an expert in the sector you want to purchase from. This is not something to be ashamed of! Though, be aware that your vendor IS an expert in the matter. During the “RFI” (Request for Information”) you are going to study the relative sector from which you are looking to acquire services/products. Research into the products and do not be shy to invite vendors over to discuss their products. Learn to know their (dis)advantages and how they can serve your business. In the end… always translate certain “features” / “technologies” into basic requirements. For instance ; IT Storage projects revolve around “capacity”, “performance”, “availability” & “integration”. Thin provisioning, snapshotting, deduplication, … all revolve around “capacity”. So do not be fooled by the nice “bling bling” that vendors portray and search for the essence of what you want to achieve. During this round, you will also define your list of requirements and selection criteria! So be sure to look for the elements that should compose these requirements/criteria.
- Start-up ; Invite the vendors to take part and ask them to confirm. After receiving confirmations, send the RFP to all vendors at the same time.
- Round One ; During the first round, you will allow the vendors some time (typically one to two weeks) to process the RFP. At the end of that period, they will need to have sent all their answers to you. You will process these and provide all vendors with a list of all questions & answers. After which, you will allow them again a given period to adjust their proposal to fit these answers. After the deadline, you will do a “downselect” of the vendors to reach the number of vendors you want in round two.
- Round Two ; When going through the answers of round one, you will notice that there are fundamental differences between vendors. Now you will adjust your requirements to align all the vendors towards one target. In addition, you will invite the vendors to explain their proposals into more detail. This will give you a more profound insight into the reality of things. At the end of this round, you will once again to a downselect to reach the last contestants (typically two or three).
- Last Round ; At the beginning of the last round, be sure to provide the remaining vendors with a clear-cut baseline that everyone should meet. Now you do not want any structural differences between the parties anymore where the main focus will be around meeting the target and pricing. Clearly indicate that this should be their “Best And Final Offer” (“BAFO”), which will be presented at CxO level. At the end, choose the party which ranks the highest in relation to your selection criteria.
- Contract negotiations ; After the selection, contract negotiations will start. In some cases, an “LOI” (“Letter of Intent”) will be signed to create a non-linear relation between the contract negotiations and the project start.
- Project Start ; The project will start with a due diligence; Here an investigation will be done by the vendor to check if all the assumptions made (and agreed upon) are valid. After which the project will kick-off!
Be aware that these kind of processes can take up to half a year! So be sure to initiate them with ample time left before your deadline. Also be aware that these things will have a delay and in most cases this is caused by yourself! You still have your regular job to do… and you will get questions that you did not consider and need time to analyze.
RFP/RFQ Document Contents
So how should a typical RFP/RFQ document look?
- Management Summary ; Create a one-pager for executives from the vendors to read through.
- Context ; Why do you launch this RFP/RFQ? Provide an insight into your way of working/environment. How does this project interact with it?
- Timing ; Setup a clear timing table. Each phase should have a clear deadline… An RFP/RFQ is a project so be sure to manage it like a project. This is also important for the vendors to allocate resources towards the process of answering the proposal. It is in your best interest to ensure that they can prepare themself properly.
- Selection Criteria ; Always use (and communicate!) selection criteria. You, and the vendors, should know how you will quote their proposals and make the final selection. Be ware that these will become the core driver for the proposals! If you hand out more than 50% on price, then you will get skimmed down offers.
- Requirements & Product/Service/Project Definition ; Apart from the selection criteria, also be aware that the vendor will provide you the most slim answer to meet your requirements. So if you didn’t define it, you will not receive it! Do not assume anything… This might again look like a no-brainer, though… 😦
- Constraints ; Actually, these can also be considered requirements… Yet be sure to state that a vendor should take certain constraints into account. Do you require a certain transition / honeymoon period? Do their employees need to have NATO-clearance, …
- Pricing Table ; You do not want all vendors to provide their own pricing table… You will not be able to compare apples with oranges. So provide your own pricing table and adjust it according to the feedback from each round. In fact, your RFI phase should have already provided you with ample information to create a pretty stable pricing sheet.
One method of coping with your IT budget is by working with the “Run, Grow & Transform – Your business”-model. In essence is sets you to categorize your budget into three areas.
Run covers the general day to day expenses of keeping the IT infrastructure running. Actually, this is your “SIB” (“Stay In Business”). Think in terms of lifecycle management and the human resource costs to maintain your environment.
Grow covers the expenses for expansion of services or growth of the company. Things like extending your virtualization or storage farm probably fall under this category. This budget aims to help the organization introduce new capabilities or improve existing ones.
And Transform covers the costs are made to change your nature. Here you should think of things like implementing a shopfloor system when coming from a paper workflow within an industry. These initiatives might seek to identify, for example, the right technologies for new organizational capabilities; fundamental changes to business processes; or a new product or service offering.
When managing a budget in this manner, you should be able to gather tour full “Run” budget and a part of the “Grow” budget. If you fail to do so, then you have lost the confidence of your board. This part of the budget is in reality the minimal level you need to stay on par. A lower level will force you to start phasing out services from your service catalog!
Organizations that have to trim IT budgets should avoid cutting Run initiatives. Such cuts would introduce operational risk. If an organization already is going through a tough stretch, the last thing it needs is a server, application or network failure. This really is your “Stay in Business” IT budget.
Grow budget items should tie directly to the organization’s strategic initiatives. These initiatives usually are not as mission critical as Run initiatives and often have some time flexibility, which means that they are good candidates for starting early when additional cash is available, or for deferral if cash is tight.
When finances are tight, transform initiatives often are the first to be cut or deferred—unless they are associated with key strategic initiatives that the organization views as essential to its continued operation. Even if the organization doesn’t deem certain Transform initiatives immediately essential, care should be taken when considering cutting or deferring them. That’s because Transform initiatives often are key to the organization’s long-term health. Failure to provide adequate resources to Transform initiatives can stunt an organization’s future success.
In today’s world we cannot imagine our day to day lives without technology. This reaches from our personal to our professional experienxce. At a given point, I posed myself the question ;
“What business benefit does IT bring to the table?”
We have sales that makes sure prospects become customers and make sure that they stay wit us. Production creates the product, supply chain optimizes the processes between vendors, … and so on.
After pondering about it, I came to the conclusion that there are two benefits ;
Some call it “Time to market”, others say “Speed of exection”, … But feel free to name it any way you want. In essence the ability to change quickly is where IT needs to prevail. If IT becomes a bottleneck for the organization, the it has lost its main function. And here we see one of the basic aspects why some IT departements are losing the fight for budget. If you are a bottleneck for the company, why should it invest in “you”?
IT prevails in automation and automation wins when an economy of scale is at hand. When a company is expanding their operations, then IT will be there to make sure that the costs do not grow exponentially. That is why IT is more native to enterprises and still a bit akward to small business owners.