August 2022 Summaries

Cloud cost anomalies can cause significant disruptions to work, with 41% of engineers reporting that cost issues last for at least a few hours per week. Running Kubernetes without real-time cloud cost monitoring and reporting makes it difficult to identify the source of these issues, leading to prolonged investigations that can take up an entire sprint or more. Implementing real-time cost visibility, allocating costs effectively, and analyzing historical cost data are key steps in minimizing disruption and optimizing cloud costs. By using a tool like CAST AI, which provides free cost monitoring for Kubernetes clusters with public pricing analysis, organizations can save 50-75% or more on their bills.

Building a homegrown cloud cost management tool can be a costly and time-consuming endeavor, requiring significant investment in engineering resources and potentially diverting focus from core business priorities. Before making a decision, teams should assess the financial implications of building their own tool, considering factors such as engineer salaries, overhead costs, and opportunity costs. Additionally, they must evaluate whether their team is strategically positioned to develop cloud cost optimization expertise, and determine how much cutting cloud costs aligns with their overall business goals and priorities. Teams may also consider alternative approaches, including open-source solutions or managed SaaS offerings, which can provide a more streamlined and cost-effective path to cloud cost management. Ultimately, the decision to build or buy a cloud cost management tool depends on a careful consideration of these factors and a clear understanding of the potential benefits and drawbacks of each approach.

CAST AI's automated cloud cost management and optimization platform is now available on Google Cloud Marketplace, enabling teams to meet their existing spend commitments with Google and protect against overspending through a streamlined payment process. The integration allows customers to access the CAST AI platform directly from the cloud provider without signing new contracts. CAST AI meets Google's security and solution design requirements and offers various features such as cost monitoring, rebalancing of cloud-native infrastructure for quick savings, and automatic optimization using Kubernetes-specific tools. Companies can also leverage spot machines automation to save costs. CAST AI clients typically save an average of 63% on their Kubernetes bills.

Spending on public cloud services is expected to hit another milestone, with businesses shelling out $18.3 billion in Q1 2022, a 17.2% year-over-year increase, driven primarily by public cloud services spend. This growth trend is reflected in the recent performance of Microsoft and Google's cloud units, with Azure experiencing its fastest quarterly growth rate in five quarters at 46%, while GCP saw 35% growth, slightly below analyst expectations. The cloud industry is seeing a growing trend towards consolidation, with colocation data centers facing increased competition from public cloud services. As organizations invest more in public cloud services, cost visibility becomes increasingly important to control costs, and teams can leverage plug-and-play cost monitoring solutions to achieve this. Additionally, the recent crypto crash has led to drops in GPU prices, which may impact the profitability of GPU mining. Furthermore, companies such as Amazon are expanding into new industries through acquisitions, while security concerns remain a top priority, with Log4j identified as an "endemic vulnerability" by the First Cyber Safety Review Board.

AWS recommends running highly available EKS clusters with worker nodes in node pools that are spread across multiple Availability Zones or Regions for reliability, but this approach can lead to sub-optimal utilization and significant cloud waste and high costs. Using a single node pool with maximum utilization is a more cost-efficient alternative, as it allows teams to avoid the mounting costs of cloud resources by keeping all nodes completely full, eliminating any cloud waste. This approach requires constant monitoring to ensure utilized and requested capacity match, making automation a key factor in its success.

Kubernetes is now used to run at least 50% of production workloads, according to a recent survey by Data on Kubernetes. The adoption of Kubernetes is driven by standardization, consistency, and management. Google is betting on the cloud breaking up and embraces multi-cloud, reducing the risk of vendor lock-in. IBM failed to capitalize on its potential as a major cloud service provider due to marketing missteps and duplicated development processes. Managed service providers are becoming increasingly important as companies transition to the cloud. The role of managed service providers is growing, with enterprises accelerating their transition to the cloud and planning to use more public cloud capabilities.

In January and February 2021, enterprise spending on cloud infrastructure services reached $37 billion, up 35% from Q4 2019. Amazon and Microsoft continue to dominate the market, with IBM acquiring multiple cloud consulting firms in recent months. F5 Networks acquired Volterra for $500 million, while Twitter moved its data centers to AWS' ARM processor platform. The US Capitol riot led to AWS cutting off Parler, which later announced it was coming back online using hosting services from SkySilk. CAST AI joined the Cloud Native Computing Foundation and expanded support for cloud providers including DigitalOcean and AWS Spot instances.

In February, Gartner's research revealed that by 2025, over half of IT spending will move to public clouds. This indicates a significant increase in the adoption of cloud technologies. The shadow IT problem is expected to grow as more employees use public cloud services without internal understanding or control. As a result, there will be increased interest in cost optimization and monitoring tools to manage cloud expenses. Amazon's advertising revenue reached $30 billion, while Nvidia abandoned its ARM purchase due to regulatory concerns. The EU announced the European Chips Act with €43 billion investment into semiconductor research and production over the next decade. Kubernetes use is growing, with 90% of users choosing cloud-managed services. Security issues were highlighted by Roblox's three-day downtime and exposed sensitive data due to unsecured AWS S3 buckets. Nvidia demonstrated effective ransomware retaliation after being targeted by a cyber attack.

Google Cloud has increased its storage pricing, a move that may force companies to rethink their current architecture or pay more to keep their applications running as usual. This is not an isolated incident, but rather one of several cloud-related news stories from March, including Intel's plans to build a new billion-dollar chip factory in Germany and the acquisition of cybersecurity company Mandiant by Google. The Flexera 2022 State of the Cloud report reveals that Microsoft Azure is closing the gap with Amazon Web Services, and many enterprises are adopting multi-cloud strategies. Meanwhile, a breach at Okta was discovered two months later than expected, affecting 366 corporate customers, while another breach at AutoWarp in Azure allowed attackers to access credentials for other tenants. Additionally, a misconfigured Amazon S3 bucket exposed the data of a French online luxury clothing store, and Intel is building a new manufacturing operation in Germany to boost chip supplies.

The cloud computing landscape is rapidly evolving, with companies struggling to monitor costs and optimize their use of Kubernetes, a popular container orchestration platform. The Pentagon has canceled its $10 billion JEDI cloud contract with Microsoft, instead opting for a multi-cloud approach. Meanwhile, cellular networks are shifting towards commodity hardware with the help of cloud providers like Azure. Zoom has agreed to acquire Five9, a cloud call center service provider, in an all-stock deal worth $14.7 billion. A fake AWS product called Infinidash went viral on social media, highlighting the ease with which new products can be created and perceived as legitimate by industry professionals. Research shows that AWS usage is still on the rise, but its growth rate trailed behind its peers in 2020. Enterprises are increasingly turning to Kubernetes, with 37% of developers using the platform for infrastructure development. A survey by Pulse and Red Hat found that enterprises are deploying workloads on containers and choosing hybrid cloud environments. CAST AI has released new features for its kOps service, including cost optimization and autoscaling capabilities.

The cloud business has seen significant advancements this April, with containers being a major focus area. Amazon Web Services (AWS) customers have largely adopted containers as the default way to build new applications, with almost 90% of Kubernetes developers using cloud-managed services instead of self-managed clusters. The most widely adopted cloud-managed orchestration solution is Amazon Elastic Container Service (ECS), which is also facing challenges due to its reliance on proprietary AWS technology. Meanwhile, Microsoft has announced a public preview of new virtual machines powered by Arm-based processors, offering improved price-performance and competing with IBM x86-based machines. The chip industry is experiencing disruptions due to the ongoing pandemic in China, affecting companies like TSMC and 3M's semiconductor coolant plant. Cloud maintenance issues have also led to outages for Atlassian customers, while a data breach at CashMama exposed sensitive Indian data. A Japanese data center company has found an unusual business diversification strategy by using empty wastewater tanks to farm eels, highlighting the innovative approaches being explored in the industry.

AWS announced new features, including Graviton 3, a faster and more power-efficient Arm-based processor, and released its open-source autoscaling tool Karpenter to production. The company also introduced Amazon SageMaker Canvas, a service that makes machine learning easy for non-specialized engineers or business users. Additionally, the top cloud vendors, such as AWS, Dell, and Google Cloud, continue to grow in revenue, with AWS growing 10% faster than it did a year ago. Other news includes Nvidia's acquisition of Arm being scrutinized by regulatory bodies, and DCI Indonesia becoming the world's top IPO of 2021. The trend of single cloud providers is declining, while hybrid and multi-cloud architectures are gaining popularity. CAST AI also released new product features, including Instant Rebalancing, SOC 2 Type II compliance, Spot Fallback, and enhanced Available savings reports.

The cloud industry experienced a mix of significant disruptions, security breaches, and emerging trends in 2021. Notable outages included those at AWS us-east-1, Google Cloud, Facebook, and OVHcloud, which affected various services and impacted users worldwide. Meanwhile, security vulnerabilities such as Log4j and Microsoft's zero-day vulnerabilities highlighted the industry's ongoing struggle with security. Research revealed that public cloud providers dominate 61% of global cloud infrastructure spending, while cloud-native technologies like Infrastructure as Code and container orchestration gained popularity in response to COVID-19. Automation became increasingly important for managing rising cloud costs, but many companies still lack effective tools for monitoring and eliminating cloud waste. The industry also saw significant developments in the use of automation, the rise of hybrid and multi-cloud strategies, and major milestones from cloud providers like AWS and CAST AI.

This month was marked by a slowdown in the tech industry, with several companies experiencing revenue underwhelmings and stock plummets, including Snapchat, which reported poor earnings and future estimations, leading to a ripple effect on the market. The company's reliance on cloud providers such as AWS and Google Cloud is highlighted, with over 40% of its revenue going towards these services. This trend is also seen in other companies, with many realizing that reserving capacity for cloud bills may not be an effective solution. In contrast, automated cost optimization through AI-powered solutions has proven to be a viable alternative. The industry is also facing challenges such as falling valuations, dropping VC funding, and layoffs, with tech startups and giants under pressure in the looming bear market. On a more positive note, AWS plans to expand its Oregon-based region by 5 data centers, while Broadcom's planned acquisition of VMware has been seen as a thought-provoking move. The cloud industry is also grappling with security concerns, including breaches and outages, highlighting the importance of communication and security in cloud-native applications. Finally, there is a growing emphasis on cloud-native development, with Gartner and IDC predicting that 90-95% of applications will be cloud-native by 2025. However, many IT decision-makers struggle to understand what "cloud-native" means, leaving questions about readiness and preparedness.

The latest developments in the cloud computing world include a new cost optimization tool that can automatically manage cloud costs, with CAST AI being a leading solution. Google Cloud continues to struggle to compete with AWS and Microsoft Azure, but has made some notable deals with companies like Deutsche Bank and Sabre. IBM is expanding its hybrid cloud offerings in Africa, while OVH Groupe SAS has launched an IPO to raise funding for international expansion. The cloud technology industry is seeing significant growth, with Bain's 2021 Technology Report showing that publicly traded companies in this niche are worth nearly half a trillion dollars. Meanwhile, Microsoft is facing security challenges, including a recent zero-day vulnerability in its Azure service, which impacted around 30% of Cosmos DB customers. CAST AI has also released some new product features, including improved cluster onboarding and organizational roles.

HashiCorp's State of Cloud Strategy Survey revealed that multi-cloud is the new normal, with 76% of respondents already working in multi-cloud environments and 86% expecting to use it within the next two years. The survey also found that digital transformation initiatives are driving multi-cloud adoption, along with avoiding single cloud vendor lock-in, cost reduction, and ability to scale. However, skill shortages and security concerns are significant inhibitors to multi-cloud adoption. Additionally, the survey showed that COVID-19 did not significantly impact cloud adoption in many organizations, which were already well underway with cloud efforts before the pandemic started. The survey also highlighted the growth of modern cloud-native technologies such as Infrastructure as Code, container orchestration, and network infrastructure automation.