
Ask HN: How do you tackle your Cloud Cost Management? - ourhivemind
Hello Community, We are a team of engineers and product guys, that have built SaaS products in the past and got bitten too many times with cloud cost surprises which ended up taking too many innovation product cycles not just $$. We believe teams responsible for keeping things up and running are wearing too many hats now more than ever and each of those chipping away at your operational cycles. Our desire is to shift the conversation from tools to workflows for tasks as tedious as (and critical) cost management. Appreciate if you can take sometime to provide your inputs to our Survey Link: https:&#x2F;&#x2F;goo.gl&#x2F;9y5qY1.Looking forward to the conversation. Thanks.
======
QuinnyPig
Another cloud cost SaaS product!

I'll slightly modify my response from another place:

For those unfamilar with my work/nonsense, I write Last Week in AWS, a snarky
gathering of news from the AWS ecosystem, published (rather obviously) weekly.
What's somewhat less known is that this is a side project of mine; by day I'm
an independent consultant who solves one problem: I fix the horrifying AWS
bill. To be clear before I dive in, I've got no vendor partnerships with
ANYONE, my work is purely advisory in nature, and I write zero production code
for my clients. Please don't think of me as anything even slightly approaching
a competitor to what you're likely thinking about building-- I'm not. I wish
this were a nut you could crack with code, believe you me.

"Dealing with the AWS bill" is a deceptively complex problem. If I can lay out
something of a maturity model I created just now off-the-cuff, there are five
stages:

Stage 1: You don't really do anything about your bill. You try to remember to
check it, and if you get an unpleasant surprise (think "someone compromised my
account," or potentially more expensive, "I used Amazon Macie") you call AWS
Support, sob into the phone, and they take pity on you.

Stage 2: You're starting to think about billing more proactively. You break
things down via cost allocation tags. You look through the account monthly and
remember to turn things off when you're done using them. Good on you!

Stage 3: The bill is Too High(tm). You've got a managerial mandate to start
taking steps to reduce the bill. Nevertheless, it will continue to climb,
until you hit...

Stage 4: The CFO has a heart attack, but survives. When the paramedics depart,
he or she kicks your door off of the hinges. This is often misunderstood as
"you're spending too much money" when in fact it's usually of the form "Last
month the bill was $3 million, this month it's $4 million, and while $1
million is a giant pile of money to you personally, what the CFO really cares
about is whether this is a fluke or the new normal, what this means for the 18
month projections, the unit economics of the business, whether they'll have to
issue guidance, etc. This is incidentally where virtually all of my clients
are. It's not so much "lower the bill" at this stage as it is "understand the
bill and predict it accurately." It just so happens that by doing the latter
you accomplish the former as a side effect.

Stage 5: You're several years ahead of the rest of the industry, and are
looking at cross-service, cross-account cost attribution of the form "I ran a
query on some stored data across a boatload of services and it cost $50K.
While that's a drop in the bucket of my total bill, it'd be nice to know what
it's going to cost before I click the button." If you fall into this category,
there's a terrific chance we've spoken at least once, and your bill is at the
point where Jeff Barr has named one of his yachts after you.

The problem isn't the lack of tooling-- it's that all of the tooling in this
space is relatively similar, and just waiting around for AWS themselves to
render them obsolete when and if Cost Explorer evolves to the point where a
human being can make sense of it.

Since you're talking about building a SaaS product and looking for feedback,
allow me to give you some. Please don't take this as criticism-- it comes as
the result of many hundreds of conversations I've had with virtually every
player in the AWS costing space.

If you charge a percentage of the AWS bill, you're mathematically being very
smart-- you charge people based upon usage and your incentives are aligned.
Unfortunately both your customer's finance team and AWS themselves with
absolutely hate you. The psychology doesn't work. Finance barely tolerates
variable spend from AWS itself; they'll not even slightly accept it from a
third party vendor. Specifically to this point, my entire business is built
around reducing AWS spend; my billing model is a fixed fee paid in advance,
and if I don't save you $X, I give you your money back. I have never had to
give someone their money back. It's not because I don't want a percentage of
the 8 figures a year I save my clients, it's because there's no great way to
get there from here. Talk to any of the large vendors in this space, and
they'll tell you that the variable pricing model is a bear to overpower during
the sales process.

Giving some form of SaaS platform or hosted bot access to my AWS account is a
complete non-starter for any company that has any form of regulatory
requirement, or indeed any form of diligence program in place unless and until
you can borderline pass a SOC2 to attest that you're a grown-up corporation
who takes things seriously.

You're also likely not aimed for success if your approach starts with
something like "if you use Cost Allocation tags correctly, it spits out great
reports that are highly accurate." Well... yes. That's the entire problem.
People don't do that when they start, and don't think to until it's a huge
mess. If they have tagged everything properly (hint: EVERYTHING has to be
tagged, including things you're probably forgetting), your Slack bot or SaaS
offering that charges a percentage of their (presumably large) bill gets
replaced with Cost Explorer, either via dashboard or API.

Lastly, this is a very, very, very crowded market. "I'm reporting Cost
Explorer data into my platform" isn't enough of a differentiating factor to
stand out in this crowd-- and Cost Explorer itself is coming for you.

Please let me know if I can help shine any more light on anything I've
mentioned, or otherwise help crush someone's dreams.

As a consolation prize, if you're at re:Invent let me know; I'll buy you a
drink and trade war stories with you.

~~~
ourhivemind
Corey, We have heard you talk at multiple conferences and appreciate your
perspectives. We are in the Bayarea and will definitely take up in your offer
on some of the points you describe above. Thanks

