How Observability Has Changed the Game for Companies in the Cloud Austerity Era
Observability helps maintain high performance and allows innovation while reducing costs and using resources efficiently.
Due to the need to quickly provide innovation, better experiences, better services, instantaneous responses, and new online services, companies started their digital transformation with high priority moving the workload from traditional workloads to the Cloud (multi-cloud, cloud-native), changing business processes, hire new people, introduce new technologies, and sometimes transform the business.
Because of this aggressive move to Cloud, the costs started to grow exponentially, the main priority at that time was performance, new features, and new experiences, but the companies started to lose control of these costs. As a result, according to Forbes, 30% of cloud spending is waste.
At the same time, we are in a challenging economic scenario with high inflation and interest rates. As a result, companies need to reduce investments and do more with fewer resources. Therefore, companies should ask themselves what the cost of being late to market to balance the decisions is; the price is sometimes higher than desired, such as losing customers, reputation, and money.
It creates a complex scenario where the companies should reduce costs, not only infrastructure costs but also labor costs. But, at the same time, they want to expand the business, provide innovation, and keep their solutions with high performances. So we can name it the Cloud Austerity era, where we can also see companies reducing the pace of moving workloads to the cloud and starting the Cloud Repatriation, moving the workloads back to on-premise.
The question we should reply to is, how to keep the high performance and continue to provide innovation while reducing costs and using resources efficiently? The response is Observability.
1 — Observability Provides Visibility for Better Business Decisions
In the complex scenario, Observability performs a vital role in providing better visibility of the platforms and applications, contextualizing the problems, resolving cloud complexities, correlating all IT components, and identifying the most critical components based on the transactions, number of users, traffic and some others.
Observability can provide this visibility by:
- Centralizing information about application dependencies
- Centralizing information for dashboards and reports
- Identifying and quantifying issues with high business impact
With that, Business leaders can make better business decisions on where to reduce investments, where to invest more, being able to forecast their investments.
2 — Observability Reduces Operational Efforts
The movement to the Cloud will transform Capital Expenditures (CapEx) into Operational Expenditures (OpEx), allowing the company to use on-demand IT resources and reduce the operations related to on-premise infrastructure maintenance.
Conversely, the complexity of maintaining the new environment grows, and virtual machines can become hundreds of pods and containers; monolithic applications transform into a complicated set of smaller independent components.
It drives companies to hire more skilled people to operate the environment, improve reliability and performance, find the root cause of problems, identify the bottlenecks, etc.
Observability can support organizations in reducing labor costs by:
- Identifying component dependencies and reducing the operational complexity
- Creating Automatic diagnoses and RCA through artificial intelligence (AI)
- Reduce the number of tickets by correlating and contextualizing them
- Identify underutilized IT resources and optimize the usage
- Feeding FinOps and Application Resource Management (ARM) solutions
3 — Observability Promotes better Customer Experience with minimum investment
One of the main targets of Digital Transformation and IT Modernization is to improve customer experience using company solutions.
More than ever, the end-user experience requires an ever-increasing performance and availability; no one can wait 0.1 seconds to open an application to finish a transaction.
The demand for availability is in the same situation; 10 minutes with an unavailable application can cause a company to lose millions of dollars.
A poor experience can result in customers finding another alternative, and sometimes they will never return.
Observability is necessary for the Cloud Austerity era to avoid the executives focusing only on containing costs rather than improving customer experience. Unfortunately, the consequences of this decision can be high.
As we can see in the image above, Observability can reduce the time from Mean Time to Detect (MTTD) to complete restoration, sometimes solving all the problems before impacting the customers and providing an immediate root cause.
Observability can also support the teams to deliver better applications by analyzing the code performance, detecting real-time issues on the CI/CD pipelines, and comparing old and new versions.
4 — Observability Supports Organization on Sustainability
Some projects start with Sustainability targets, others should comply with government regulations, and some projects don’t have specific targets. Still, they know Sustainability can support them to increase the company’s reputation, can be used in the company marketing, and, why not, to reduce costs (for example, reducing IT resource utilization, electricity consumption, and some).
Very soon, the expectation is that the technology could be responsible for consuming 20% of the total electricity in the world.
Using Observability, we can:
- Understand which IT component is consuming more IT resources
- Provide information about the application’s efficiency
- Keep the performance with reduced IT resources
- Feed Sustainability Solutions
Conclusion
The actual moment is challenging, the companies don’t want to take the risk of being late to market, to reduce the innovation pace and see the competitors ahead, but they still need to be competitive; they should reduce costs in this Cloud Austerity era and continue the digital transformation projects.
Observability becomes a mission-critical topic; without Observability, companies become blind. Furthermore, it is almost impossible to measure what is happening with the IT infrastructure, if their customers are satisfied with the applications, and if the company uses the IT resources efficiently.
Observability provides data to the business on where to reduce costs, where the customer experience is being impacted, and make the decisions on reducing costs or investing more money.
Organizations with a good Observability strategy will be far ahead of those without Observability in their plans.
Tiago Dias Generoso is a Distinguished IT Architect | Senior SRE | Master Inventor based in Pocos de Caldas, Brazil. The above article is personal and does not necessarily represent the employer’s positions, strategies or opinions.
