Cloud Cost Management: Risks of Building a Cost Reduction Tool In-House

Teams looking to reduce their cloud bills first turn to native cost management tools of their cloud providers. But there comes a time when the native cost management tools don’t cut it anymore, and engineers are forced to choose between buying and building a cloud cost management tool. Which choice is better?

Cloud cost management

Once cloud initiatives start to scale, your cloud footprint will likely expand into multiple services, accounts, and providers. You need a more comprehensive approach to understanding and controlling cloud costs.

Is it better to build a homegrown tool based on open source or buy a managed SaaS solution and get the job done?

Build vs. buy in the world of cloud cost optimization

Hasty decision-making might lead you down the path of poorly scoped development, costing you way more dollars than an engineer with a habit of overprovisioning by 300%.

You need to take care of the three things before running off to build your custom tooling.

1. How much will it all cost?

Investing in a homegrown cloud cost management tool needs to make sense from a financial perspective.

Do you know how many engineers will be building the new tool? And how many hours will it take? You can’t calculate the cost of your DIY solution without knowing that.

Tech giants might have some 5-10 engineers to spare on building and maintaining their cost tooling. Do you have that kind of flexibility?

Start by assessing the number of engineers you’d need by their average annual salary. Then add some more for overhead costs (someone will have to oversee the project and run QA tests). This is how you discover the opportunity cost of building your own cloud cost management tool.

2. Are you really the best team to build this tool?  

Why is your team better suited to solving the cloud cost problem than a team of full-time engineers who have dedicated the past few years to it?

And even if you have top talent on board, are you sure that this is what they should be doing in the first place? There’s a reason why there are entire companies out there with the sole mission of solving the many problems facing cloud users (we happen to be one of them).

The mission of your business is solving problems as well – but of your customers. Shifting your focus to cloud cost optimization might get you a cloud bill win, but what about the long run? 

This leads us to the final question.

3. How strategically important is cutting cloud costs to your business?

Saving millions of dollars on the cloud – as Branch did – is a great way to boost your business. But will optimizing the cloud deliver value to your customers? Will it help you compete in the market?

When you ask your engineers to focus on cloud cost, they’re no longer involved in building new features.  

Is cloud cost optimization a top priority? How does it compare to other items on your roadmap?

Research shows that high-performing organizations make sure their internal teams focus on core aspects of their business and buy all the software that’s not strategic as SaaS. There’s an important lesson learned here.

So, why do teams think building a homegrown tool makes sense?

An engineering team may decide to build a homegrown tool for many reasons. 

One of them is the feeling that legacy cost optimization solutions aren’t up to the task when facing cloud-native technologies like Kubernetes. 

Moreover, these solutions get acquired by larger companies that aren’t that interested in speeding up innovation. Keeping up with the market becomes problematic when you’re locked in with this kind of provider.

Legacy cost management solutions were built in the times when optimizing cloud costs meant digging in endless cost reports and managing Reserved Instances. 

Now, teams need to automate every single cost aspect of running applications in the cloud – from provisioning and decommissioning resources to autoscaling them and picking the most cost-efficient resources.

That’s why top-tier companies like Netflix choose to build their own tools. Should you do the same? Perhaps that might still work if engineers don’t have to write everything from scratch. Open-source solutions offer a glimmer of hope here, but can they really help?

Is turning to open source the answer?

We wouldn’t be where we are today if it wasn’t for open-source. But is it a good candidate for cloud cost optimization as well?

Even if engineers take the route to implement a bunch of ready-made solutions, they’ll still have to put in the work to maintain this patchwork in good shape. They will be fiddling with the software to no end that way.

As stories like the Log4j fiasco show, stability can also be a problem. The downside here is that you don’t have a support team jumping on the issue ASAP or any SLAs for your business to rely on. 

Well, at least you don’t get locked in with open-source. But that doesn’t need to be a risk anymore with cloud-native solutions like CAST AI.

Managed SaaS = zero headaches

A SaaS like CAST AI is essentially a plug-and-play cost management solution that gives you a glimpse of what’s possible in terms of cloud savings. You can dip your toes and see if it works just how you want it to. 

There’s no need to build, test, and deploy anything for months before you start getting benefits. You get all the added benefits of managed SaaS without getting locked in. 

All it takes is connecting your Kubernetes clusters, and you can instantly check how much you could save up and implement recommendations automatically.

Run the free Savings Report to discover which parts of your cloud setup generate unnecessary costs – and fix that before reporting to the Finance lead.

  • Blog
  • Cloud Cost Management: Risks of Building a Cost Reduction Tool In-House

Leave a reply

Notify of
Inline Feedbacks
View all comments

Recent posts