Atlassian is an enterprise team collaboration software company that builds products for software developers, IT departments and business professionals. Its engineering team needed an accurate picture of its Amazon EC2 RI coverage. Without having that picture and full visibility of its cloud spend it was hard to determine if as many seconds possible of a RI term were being put to use.
As Atlassian went through an intense period of growth, and its cloud infrastructure became increasingly complex, being able to maintain optimal RI coverage at scale was a key challenge. They needed a cloud cost management solution to give deep analysis of RI utilization and also proactive recommendations to improve efficiency. This also means building a strong foundation for potentially transitioning RIs to Amazon Web Services (AWS) Savings Plans.
To maximize RI coverage, they used the Cloudability Platform to create a “waterline,” or a visual indicator, of where RI coverage becomes high enough to yield
Atlassian’s team came up with a goal of 90% coverage on their aggregated RIs. They used this waterline report to know that they were using as many reservations as they needed to achieve savings. This built confidence in proactively purchasing additional reservations as their cloud usage scaled, using recommendations from Cloudability.
Determining the profitability of an individual reservation purchase based on its break-even point is a good first step—it’s essential to understand the fundamental principles of RI buying on this level. But in the real world, you aren’t likely to be faced with such simple examples. Chances are you’ll have many instances coming and going throughout each day, meaning that in order to make the right RI purchases, you’ll have to base your decisions on an aggregated view.
Here’s a foundational example of how Atlassian built their waterline report.
Let’s say that this 10 second block is repeated over and over again for one year. We can see that if we purchased four RIs, they would each have 100% utilization; a fifth RI would have 90% utilization, a sixth RI 80%, and so on. It’s unlikely that you’d purchase a seventh RI, as it would only have 50% utilization. In any case, you can consider each layer in the histogram and compare its utilization against the break-even point of the appropriate RI.
As Atlassian’s Principal Systems Engineer, Mike Fuller explains, “We purchase RIs at or above 90% utilization. This provides good savings on your RI purchases and also allows a margin for some reduction in utilization while maintaining savings. By covering some instances that are running less than 100% of the time, we maintain a higher RI coverage than otherwise would be possible.”
If that sounds complicated, don’t worry— Cloudability distills these usage histograms for you, and you can easily set your own waterline value to create a RI portfolio that suits your specific needs.
Atlassian uses Cloudability’s RI Planner to help them maximize their AWS investment by analyzing usage to identify opportunities for savings via purchase and modification recommendations. On the main RIs Planner page, Atlassian’s team can see purchasing options, estimated net savings, and get an idea of total upfront fees and estimated savings
All of your recommendations will now be based on this waterline. To see for yourself, select one of the individual recommendations (using the “Details” button) and look at the displayed histogram.
“The power of setting your usage rate in Cloudability is that you are in control of the recommendations Cloudability provides, setting the trigger point on which you purchase RIs for your Amazon EC2 instances,” said Mike. “We are able to use this feature to validate the RI purchases Atlassian makes, assisting Atlassian in maintaining an RI utilization at or above 90% and by result achieving great savings.”
Pro-Tip You might even consider setting your threshold at 100%, so that you only purchase RIs that are projected to see 100% utilization. This could be a good option if you have a very large selection of recommended RI purchases, and you need to prioritize which ones to purchase first. Setting this high waterline is also a good option for those getting started with RI purchasing, since it allows you to build up confidence before making more aggressive RI buys.
As enterprise infrastructures on the cloud grow and scale, maintaining RI coverage is critical. This cannot be done with over-simplistic reporting tools alone: a platform like Cloudability is highly recommended to track cloud costs at scale. As Atlassian continues to grow, they use Cloudability and our collection of data-driven analyses, reports, and automation to generate the right cloud cost and usage insights to continue running an efficient cloud infrastructure at scale.
Whether you’re already using a waterline strategy, or have yet to fully analyze your RI needs, Cloudability can help you start planning for the future of your organization’s cloud today.