A recent Stanford University study reported that 25-30% of all data center investments are tied up running idle IT workloads, generating zero return on investment[1] (… and costing the USG a fortune).
Security Solutions Technology (SST), an Authorized Cloud Pricing Services Reseller, has added this new innovative service to its GSA IT 70 Schedule so customers can easily access this capability. Contact us to discuss how to take advantage of the cost benefits for existing and/or upcoming contracts and how we can save your agency real money on Cloud services.
If the U.S. Government (USG) is serious about reducing its waste and turning its spending deficit around, CIOs, CTOs, CEOs, and many others need to keep reading. Cloud Pricing Services (CPS) has flagged a rapidly developing bubble in Cloud infrastructure pricing due to an outdated USG Cloud procurement and contracting procedure. Currently, the USG is a victim of its own methodology that is placing budgetary constraints on its highly sought-after migration to the Cloud and solely benefits the profit margins of Amazon, Microsoft, and other Cloud providers. WAKE UP, you are paying for resources you are not using. For too long this status quo has been afforded, coming as a detriment to our nation’s security, and at the expense of the American taxpayer.
This Cloud Pricing technology is on GSA IT 70 SIN 132-32, contract number GS35F387DA.
Current State of Cloud Infrastructure Costs
IT departments purchase Cloud computing resources assuming a ‘theoretical maximum’ workload (basically 100% utilization) to avoid performance issues when encountering a surge in computing resources needed, for example, a spike in website traffic. However, surges are incredibly rare, and resources almost always end up going underutilized.
Meanwhile, Cloud providers bill for their infrastructure based on the total amount of computing resources they supply (measured in time), as opposed to the total amount of computing resources an organization actually consumes (like electricity). Due to industry’s need to self-serve, this billing model has managed to deceive USG Contract Officers (COs) since Cloud’s emergence and cost taxpayers billions of dollars. Just think about it, the way Cloud providers bill for an infrastructure usage would be the absolute equivalent of the electric company charging you for your air conditioning (AC) unit whether it was running or not.
In reality, USG agencies are only consuming a tiny fraction of the total resources being supplied, yet it is forced to pay for its entire allocation – including the unused portion. Can you believe you’re paying for Cloud resources you’re not even using?
“The truth is, servers rarely run at full capacity, even in extreme conditions…
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Most studies show that typical server utilization is around 10% or less.” [1]
– Joe Weinman, Author, Cloudonomics
The Financial Freedom to Accelerate Your Mission
Our vision for a more modernized approach to procurement and contracting is for the USG to;
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easure the exact amount of computing resources it uses prior to the Request for Proposal (RFP);
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Mandate that COs include their agency’s usage as part of their RFPs; and,
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Require contractors to submit bids where Cloud pricing is based solely on the amount of resources an agency’s IT workloads consume.
This Next-Gen approach would reduce USG Cloud costs by 15% or substantially more, without compromising security, uptime, or performance requirements – it would be the same FedRAMP Cloud infrastructure agencies already contract for, without paying for the underutilized resources. Think of the potential virtuous cycle these new savings would create for an agency’s mission. For instance; the Department of Defense (DoD) could save more than $1.5 Billion on their upcoming $10 Billion Joint Enterprise Defense Infrastructure (JEDI) Cloud contract. What could DoD CIO, Dana Deasy, do with an extra $1.5+ Billion?
New Emerging Technology That Quantifies Actual Usage
CPS has developed the Cloud Gauge, ‘Made in USA’ patent-pending software that monitors and measures the consumption of the underlying resources within a computing environment (it runs exclusively behind the firewall in a cloud or on-premise environment). The Cloud Gauge works similar to how an electricity meter measures WATT consumption when appliances are powered on. The Cloud Gauge utilizes an algorithm to convert disparate usage metrics (Compute, Graphics, Storage and Network) into a standardized unit of measure, known as the Workload Consumption Unit (WCU). Think of the WCU like electricity’s WATT, but for computer processing power. From a usage perspective, the WCU is equivalent regardless of the computing environment or the underlying hardware on which
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It can seamlessly adapt to measure high-performance computing environments that are inclusive of Graphics Processing Units (GPUs) – the backbone resource for computing Artificial Intelligence (AI) and Deep Learning applications, and,
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It has the ability to accommodate highly specialized computing resource types in advanced HPC environments, for example, Field Programmable Gate Arrays (FPGA) or Intelligence Processing Units (IPU), based on a customer’s needs.
The patent-pending WCU serves as a unit of cost accounting and enables an apples-to-apples comparison across different environments and Cloud providers. It also provides an unbiased way to benchmark costs to quantify potential waste; such as, evaluating an upcoming Cloud migration, comparing existing Cloud costs versus potential alternatives, and quantifying cost inefficiencies across various departments.
CPS has specifically designed an IT Workload Cost Analysis-as-a-Service (AaaS) product for USG customers, an offering that includes a license to the Cloud Gauge, a workload cost forensic service, monthly briefing(s), and a special end-of-project report deliverable. In other words, USG customers will be responsible for installing and running the Cloud Gauge software, and CPS will handle analyzing workload usage and costs, provide monthly briefings, and deliver a comprehensive project-end report. The Workload Cost AaaS is an essential tool for COs to utilize during their market research period to quantify existing waste, identify short- and long-term cost savings opportunities, and to exemplify their fiscal responsibility.
The Workload Cost AaaS provides a rare opportunity for an agency to generate significant savings that can be reinvested to double down on their Cloud migration, but COs must ensure all new RFPs include the Cloud Pricing solution as part of their Statement of Work (SOW). If adopted universally, American taxpayers stand to save billions of dollars that would otherwise continue to inflate the profits of Amazon, Microsoft, and others. The White House, GSA, and NIST must review the collective benefits of this new technology and standard, and immediately mandate that all COs perform an IT Workload Cost Analysis before any new RFP gets issued.