Cloud buying is getting renewed attention as enterprises seek added cost savings after migrating systems to the cloud in response to Covid-19. It’s time for corporate cloud buyers to learn more about the Amazon Web Services (AWS) Savings Plans, launched in November 2019, which provide cost savings of up to 72 per cent for cloud buyers.

A recent survey of more than 50 IT executives on Pulse.qa, a social research platform, showed that only 16 per cent of IT executives believe that AWS Savings Plans are saving them money on their cloud spending. While the potential for cost cutting is real, you need to understand the nuances of this offering to ensure you’re reaping the biggest savings.

How AWS Savings Plans work

AWS Savings Plans involve a one-year to three-year commitment to a consistent amount of usage measured in dollars per hour. For example, if CIOs commit to $100 of compute usage per hour, they will get the Savings Plans prices on that usage up to $100, and AWS will charge on-demand rates for any usage beyond the commitment.

AWS offers two Savings Plans:

The Compute Savings Plan is the most flexible of the two plans. Compute pricing on this plan are up to 66 per cent off on-demand rates
The EC2 Instance Savings Plan provides savings up to 72 per cent off on-demand rates. Customers must commit to a specific instance family in their chosen AWS region. This plan applies automatically to usage regardless of size, operating system, and tenancy within the specified family in the region
Businesses can’t increase a Savings Plan budget in the middle of a period of performance however. Instead, they’ll need to provision a new and separate Savings Plan.

If a CIO is running a new AWS account, they may encounter some limitations to their Savings Plans. If this happens, it’s best to work with the system integrator or AWS account representative to resolve any restrictions.

One advantage of AWS Savings Plan is being able to apply savings to on-demand instances, instead of only reserved instances. Compute Savings Plans can apply to instances across different AWS regions. Organisations can also apply Savings Plans to Fargate (instance-based PaaS for containers) and Lambda.

AWS Savings Plans don’t apply to Relational Database Service (RDS), Redshift, or ElastiCache (in-memory database and cache). Savings Plans also don’t cover any services CIOs provision from the AWS Marketplace.

Visualising the spend is vital to both the end customer and the systems integrator. A business’ AWS utilisation and coverage reports offer the ability to understand AWS Savings Plans cost and usage better. These reports show an aggregate Savings Plan utilisation trending over time. CIOs can also use these reports to view each Savings Plans with their respective utilisation, costs, and savings in a tabular format.

Navigating AWS Savings Plans

Cloud buyers who wants to take full advantage of AWS Savings Plans need to “shift left” with cloud spending management. While an organisation may not have a cloud economist on staff (or even contract), CIOs can use a cloud management platform to track cloud spending over the past three to six months to get a historical perspective.

That historical data should feed decision-making processes to determine if Savings Plans save money. The data should also serve businesses well in any service provider negotiations.

CIOs can get started with AWS Savings Plans from the AWS dashboard by using the AWS Cost Explorer or by using the API/CLI. If buying cloud services through a systems integrator, then it’s best to inquire about their use of Savings Plans.

Understanding cloud workloads is key to making good use of AWS Savings Plans, according to Venkat Ramasamy, COO for FileCloud, an enterprise file sharing, sync, back-up, and remote access solution provider.

Ramasamy stresses knowing if a business is running a variable or static workload. Unless they’re building and operating SaaS applications, chances are they’re running static loads, so AWS Savings Plans would make sense and could save a lot of money.

Scott Dix, senior solutions delivery manager for Cloudtamer.io, a cloud management platform provider, suggests using a cloud roadmap to guide the decision-making process about AWS Savings Plans. With a cloud roadmap in place, CIOs can model savings from reserved and on-demand instance spending from the early phases of cloud projects—not after the first cloud billing surprise.

AWS Savings Plans and the system integrator

The AWS Savings Plan, when used by a system integrator, has the potential to create more profit margin when a customer orders on-demand EC2 Instances. The aforementioned Pulse.qa survey of IT executives showed that 64 per cent negotiated hard with their system integrators for the best discounts on their cloud spending. Negotiating is essential because Savings Plans can deliver around 25 per cent savings overall for the system integrator.

System integrators run into risks when they don’t put themselves in their customers’ shoes, according to Amir Shariff, vice president of product and marketing at Opsani, a cloud optimisation solutions provider. He said that SIs need to be an agent for their customer when managing AWS Savings Plans.

“Use the golden rule and guide them through bringing their cloud costs down through shifting their cloud resources,” Shariff advises.

Shariff emphasises the need for the system integrator to know about the customer’s business so they can best advise them on how to lower their cloud spending. CIOs should expect as much from their system integrator.

AWS Savings Plans and the business

Dix from Cloudtamer.io recommends erring on the side of caution when committing to reserved instances and AWS Savings Plans. “What ends up happening is folks jump in and think the savings are incredible, so let’s go to the maximum and pay for the long term,” he explains. Proceed slowly, keeping a close eye on usage and savings.

Beyond the commitment that Dix mentioned, treat AWS Savings Plans as a cloud economics exercise. Take a systematic approach. Do the historical analysis and make the process adjustments and reporting changes necessary to give the business and stakeholders the full confidence that AWS Savings Plans are working to deliver significant savings on the overall AWS bill.

As Docker Inc. approaches the first anniversary of a business reset following the sale of its enterprise business to Mirantis Inc. last November, executives are declaring its new developer focus a success. Now Docker needs to navigate the path to profitability selling to that notoriously cost-sensitive audience.

In a briefing with journalists on Tuesday, Docker executives said their strategy of reducing the complexity of working with the software containers it invented more than seven years ago is gaining traction. The proof: 11.3 million monthly active users sharing applications from 7.9 million images on Docker Hub repositories with 13.6 billion code pulls per month.

Chief Executive Scott Johnston (pictured) said that’s up 70% from last year. “We’ve come a long way in building a sustainable business focused on developers,” he said.

The company is staying true to the commitment made a year ago to build an ecosystem of independent software vendors around its Docker Desktop development workbench and Docker Hub image repository. “Having learned what makes a successful code environment, we’ve gone out of our way to include ecosystem partners in what we do rather than go it on our own,” Johnston said, citing the example of the Open Container Initiative the company set up in 2015 under the stewardship of the Linux Foundation.

Playing nicely with others
Among the actions, the company has taken in the past year to deliver on that promise are a landmark partnership with Microsoft Corp. that integrates Microsoft’s Azure public cloud and Virtual Studio Code code editor with Docker Desktop. There’s also a deal with Snyk Ltd. to deliver a native vulnerability scanning service for container images. Not least is an agreement with Amazon Web Services Inc. to create a simplified workflow for developers using Docker Compose to build applications for Amazon’s Elastic Container Service and Amazon ECS on AWS Fargate.

Integration with Atlassian Corp. PLC’s Bitbucket and the Microsoft-owned GitHub code repositories has made Docker Hub a nexus for integrating, configuring and managing application components. The company also released its Compose toolset for building multicontainer applications to open source in March.

The net result of the alliances has been to “remove so much complexity from the developer as far as configuring, provisioning and standing up infrastructure in those clouds,” Johnston said. “With two commands a developer can get an application from its local place up to one of those cloud endpoints.”

He said there are now 160 ISV Docker images available from 94 verified publishers and that interest is growing. “The more partners who work with us the more partners want to join us,” he said.

Path to profitability
Now the company needs to build that momentum into a profitable business, something it was unable to do despite raising $260 million in the four years after releasing its container technology. Toward that end, the company next week will initiate a series of price hikes for its heaviest users, marking its first step toward usage-based pricing.

Docker’s generous free plan, which gives developers unlimited public repositories and one private repository, is “not economically sustainable when we have tens of millions of developers today and tens of millions more coming tomorrow,” the CEO said. “A small subset of our user base is over-consuming.” The adjustments are intended to “make sure that subset isn’t consuming to a negative for the rest of the users. The vast majority of users will continue consuming for free.”

Over the next 12 months developers should expect to see new prepackaged development environments similar to those the company rolled out for Python and Node.js earlier this year, expanded set of tools for managing images, better ways for teams to move applications into the cloud and additions to its list of Docker Certified Images and Docker Verified Publishers.

Despite past missteps under previous leadership, Docker has the luxury of patient investors, Johnston said. Insight Venture Partners LP and Benchmark Capital Partners LLC, which together plowed $35 million into the reborn company last year “are more interested in scaling to the market that’s there rather than profitability,” Johnston said. “They see an unbelievable market we created when open sourced in 2013 and we are in a phenomenal position to be a leading company in that market.