Best Practices for Cost Optimization in the Cloud
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When customers migrate to Google Cloud Platform (GCP), their first step is often to adopt Compute Engine, which makes it easy to procure and set up virtual machines (VMs) in the cloud that provide large amounts of computing power. Launched in 2012, Compute Engine offers multiple machine types, many innovative features, and is available in 20 regions and 61 zones!
Compute Engine’s predefined and custom machine types make it easy to choose VMs closest to your on-premises infrastructure, accelerating the workload migration process cost effectively. Cloud allows you the pricing advantage of ‘pay as you go’ and also provides significant savings as you use more compute with Sustained Use Discounts.
As Technical Account Managers, we work with large enterprise customers to analyze their monthly spend and recommend optimization opportunities. In this blog, we will share the top recommendations that we’ve developed based on our collective experience working with GCP customers.
Getting ready to save
Before you get started, be sure to familiarize yourself with the VM instance pricing page—required reading for anyone who needs to understand the Compute Engine billing model and resource-based pricing. In addition to those topics, you’ll also find information about the various Compute Engine machine types, committed use discounts and how to view your usage, among other things.
Another important step to gain visibility into your Compute Engine cost is using Billing reports in the Google Cloud Console and customizing your views based on filtering and grouping by projects, labels and more. From there you can export Compute Engine usage details to BigQuery for more granular analysis. This allows you to query the datastore to understand your project’s vCPU usage trends and how many vCPUs can be reclaimed. If you have defined thresholds for the number of cores per project, usage trends can help you spot anomalies and take proactive actions. These actions could be rightsizing the VMs or reclaiming idle VMs.
Now, with these things under your belt, let’s go over the five ways you can optimize your Compute Engine resources that we believe will give you the most immediate benefit.
1. Apply Compute Engine rightsizing recommendations
Compute Engine’s rightsizing recommendations feature provides machine type recommendations that are generated automatically based on system metrics gathered by Stackdriver Monitoring over the past eight days. Use these recommendations to resize your instance’s machine type to more efficiently use the instance’s resources. It also recommends custom machine types when appropropriate. Compute Engine makes viewing, resizing and other actions easier right from the Cloud Console as shown below.
Recently, we expanded Compute Engine rightsizing capabilities from just individual instances to managed instance groups as well. Check out the documentation for more details.
For more precise recommendations, you can install the Stackdriver Monitoring agent which collects additional disk, CPU, network, and process metrics from your VM instances to better estimate your resource requirements. You can also leverage the Recommender API for managing recommendations at scale.
2. Purchase Commitments
Our customers have diverse workloads running on Google Cloud with differing availability requirements. Many customers follow a 70/30 rule when it comes to managing their VM fleet—they have constant year-round usage of ~70%, and a seasonal burst of ~30% during holidays or special events.
If this sounds like you, you are probably provisioning resources for peak capacity. However, after migrating to Google Cloud, you can baseline your usage and take advantage of deeper discounts for Compute workloads. Committed Use Discounts are ideal if you have a predictable steady-state workload as you can purchase a one or three year commitment in exchange for a substantial discount on your VM usage.
We recently released a Committed Use Discount analysis report in the Cloud Console that helps you understand and analyze the effectiveness of the commitments you’ve purchased. In addition to this, large enterprise customers can work with their Technical Account Managers who can help manage their commitment purchases and work proactively with them to increase Committed Use Discount coverage and utilization to maximize their savings.
3. Automate cost optimizations
The best way to make sure that your team is always following cost-optimization best practices is to automate them, reducing manual intervention.
Automation is greatly simplified using a label—a key-value pair applied to various Google Cloud services. For example, you could label instances that only developers use during business hours with “env: development.” You could then use Cloud Scheduler to schedule a serverless Cloud Function to shut them down over the weekend or after business hours and then restart them when needed. Here is an architecture diagram and code samples that you can use to do this yourself.
Using Cloud Functions to automate the cleanup of other Compute Engine resources can also save you a lot of time and money. For example, customers often forget about unattached (orphaned) persistent disk, or unused IP addresses. These accrue costs, even if they are not attached to a virtual machine instance. VMs with the “deletion rule” option set to “keep disk” retain persistent disks even after the VM is deleted. That’s great if you need to save the data on that disk for a later time, but those orphaned persistent disks can add up quickly and are often forgotten! There is a Google Cloud Solutions article that describes the architecture and sample code for using Cloud Functions, Cloud Scheduler, and Stackdriver to automatically look for these orphaned disks, take a snapshot of them, and remove them. This solution can be used as a blueprint for other cost automations such as cleaning up unused IP addresses, or stopping idle VMs.
4. Use preemptible VMs
If you have workloads that are fault tolerant, like HPC, big data, media transcoding, CI/CD pipelines or stateless web applications, using preemptible VMs to batch-process them can provide massive cost savings. In fact, customer Descartes Labs reduced their analysis costs by more than 70% by using preemptible VMs to process satellite imagery and help businesses and governments predict global food supplies.
Preemptible VMs are short lived— they can only run a maximum of 24 hours, and they may be shut down before the 24 hour mark as well. A 30-second preemption notice is sent to the instance when a VM needs to be reclaimed, and you can use a shutdown script to clean up in that 30-second period. Be sure to fully review the full list of stipulations when considering preemptible VMs for your workload. All machine types are available as preemptible VMs, and you can launch one simply by adding “-preemptible” to the gcloud command line or selecting the option from the Cloud Console.
Using preemptible VMs in your architecture is a great way to scale compute at a discounted rate, but you need to be sure that the workload can handle the potential interruptions if the VM needs to be reclaimed. One way to handle this is to ensure your application is checkpointing as it processes data, i.e., that it’s writing to storage outside the VM itself, like Google Cloud Storage or a database. As an example, we have sample code for using a shutdown script to write a checkpoint file into a Cloud Storage bucket. For web applications behind a load balancer, consider using the 30-second preemption notice to drain connections to that VM so the traffic can be shifted to another VM. Some customers also choose to automate the shutdown of preemptible VMs on a rolling basis before the 24-hour period is over, to avoid having multiple VMs shut down at the same time if they were launched together.
5. Try autoscaling
Another great way to save on costs is to run only as much capacity as you need, when you need it. As we mentioned earlier, typically around 70% of capacity is needed for steady-state usage, but when you need extra capacity, it’s critical to have it available. In an on-prem environment, you need to purchase that extra capacity ahead of time. In the cloud, you can leverage autoscaling to automatically flex to increased capacity only when you need it.
Compute Engine managed instance groups are what give you this autoscaling capability in Google Cloud. You can scale up gracefully to handle an increase in traffic, and then automatically scale down again when the need for instances is lowered (downscaling). You can scale based on CPU utilization, HTTP load balancing capacity, or Stackdriver Monitoring metrics. This gives you the flexibility to scale based on what matters most to your application.
High costs do not compute
As we’ve shown above, there are many ways to optimize your Compute Engine costs. Monitoring your environment and understanding your usage patterns is key to understanding the best options to start with, taking the time to model your baseline costs up front. Then, there are a wide variety of strategies to implement depending on your workload and current operating model.
For more on cost management, check out our cost management video playlist. And for more tips and tricks on saving money on other GCP services, check out our blog posts on Cloud Storage, Networking and BigQuery cost optimization strategies. We have additional blog posts coming soon, so stay tuned!
New Histogram Features in Cloud Logging Make it Easier to Track Log Volumes, Errors and Anomalies!
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Visualizing trends in your logs is critical when troubleshooting an issue with your application. Using the histogram in Logs Explorer, you can quickly visualize log volumes over time to help spot anomalies, detect when errors started and see a breakdown of log volumes. But static visualizations are not as helpful as having more options for customization during your investigations.
That’s why we’re excited to announce that we recently added three new query controls along with separate colors for log severity to the histogram. These new features make it even easier to refine and analyze your logs by time range. The new histogram controls help find logs before or after the current period, jump to a specific time range represented in a histogram bar and zoom in/out of the current time window in the histogram.
Histogram colors
The histogram now makes it easier to view the breakdown of logs by severity with the introduction of color coding. For example, the severity colors make it easy to spot an increasing number of errors even when the volume of requests is relatively constant. Looking at the histogram below, the red vs blue shading makes it clear that there has been an increase in overall log volume and provides a visual breakdown of errors within that log volume.
Pan left/right to scroll through time
Sometimes in your troubleshooting journey, you may want to look at the logs directly before or after the current set of logs. Perhaps there was an unexpected spike in errors at the beginning of the time range and you need to see the logs in the time period directly preceding the current time range. Pressing the left arrow on the left side of the histogram shifts the time range earlier while the arrow on the right side of the histogram shifts the time range ahead. Either arrow will refine the time range in the query and rerun the query to return the logs in the new time range.
Zooming in or out
Zooming in or out from a given time range may be useful to visualize fine-grained details or a broader trend Clicking the zoom in or out icons in the upper right corner of the histogram refines the time range in the query and then reruns the query, returning the logs in the newly defined time range.
Scrolling to time
If you see a large spike in logs volume in the histogram, it’s useful to quickly review the logs generated during that spike. Clicking on the histogram bar that contains the spike now scrolls you to the logs generated during that time period.
Where to find the histogram
The histogram is a panel in Logs Explorer that can be displayed or hidden using the controls in the Page Layout menu. When you no longer want to display the histogram, click the “X” button in the upper right corner to quickly close it. To open it again, use the same Page Layout menu to enable the histogram display.
Get started with the histogram
These improvements move the histogram from a utility for visualization to an integral part of the troubleshooting journey. We are continuously working to launch new features that make Cloud Logging the best place to troubleshoot your Google Cloud logs. If you are not already a Cloud Logging user, review this getting started documentation or watch a quick video on troubleshooting services on Google Kubernetes Engine (GKE) to learn more. If you have specific questions or feedback, please join the discussion on our Google Cloud Community, Cloud Operations page.
Cloud and AI Paves the Future of Finance: Excerpts from FIA Boca 2022
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Financial markets were among the first to adopt new technologies, and that has certainly been true of the derivatives markets, which were early adopters of electronic trading. Going forward, new capabilities will transform the way industry participants communicate, analyze, and trade.
I sat down with Google Cloud’s Phil Moyer and former SEC Commissioner, Troy Paredes, for a fireside chat at FIA Boca 2022 to discuss the future of markets and policy, the new technologies that are already paving the way for greater speed and transparency, and how cloud can help promote greater resiliency, performance, and security to enable the long-term vision for the market. The following is a summary of our discussion.
The current state of cloud technology
When it comes to technology adoption, we’re seeing the market and participants adopt cloud technologies, and increasingly, machine learning (ML) on a wider scale. Cloud technology allows for easier, faster, and much more secure experimentation with large datasets and ML.
A recent Google sponsored study by Coalition Greenwich (September, 2021) showed that more than 93% of trading systems, exchanges, and data providers are in some way providing services on the cloud. The same study, revealed that about 72% of the financial industry across the buy side and sell side, intend to consume public cloud-data based market data within the next 12 months.
Data-driven decision-making and risk management have always been, and continue to remain, the cornerstones of the financial markets. Over time, technology innovation has facilitated access to better insights from data, and therefore, better decision-making and the ability to manage risk. That expectation is now mainstream, and will continue to grow in sophistication.
The multi-phased technology trajectory
The movement of exchanges to the cloud will occur in a “crawl-walk-run” fashion, with low-hanging fruits the first to be picked in the near term while bigger, paradigmatic changes will occur over the medium and long term. Some organizations are starting all three stages simultaneously, understanding that each will move at an independent cadence.
The “crawl” phase is one in which foundations are built, starting with organizations moving data to the cloud and experimenting with some degree of analytics. It’s one of the most important phases because it’s where the opportunity to increase transparency and risk management takes shape.
In moving to the cloud, the infrastructure – which in the past relied on a combination of people, processes, and some technology – becomes the code that runs applications. This early phase is key to empowering organizations to shift to a cloud-based, agile-first operating model that makes it easier and more seamless to launch new products in the future, including by freeing up people and resources from IT management to more mission-focused work.
Establishing the cloud operating model simplifies the “walk” and “run” phases where compliance is more automated, latency-sensitive applications are more readily available, and the next generation of exchanges, market participants, and regulators is better prepared to meet future challenges.
The “walk” phase is where much of the innovation happens. Exchanges are making significant progress in leveraging foundational data decisions in the “crawl” phase and innovations in the cloud to improve settlement, clearing, risk management, collateral management, and compliance, and launch new products.
And finally, the “run” phase is where organizations will start to move the latency-sensitive markets to the cloud, as the markets increasingly will demand low-latency and high performance along with transparency and analytics to solve historical obstacles to market access.
Opportunities for both regulators and market participants
Any time significant technological change takes place, regulators explore its implications, particularly with respect to their ability to meet their regulatory objectives.
Increasingly, we are seeing technological change driving more opportunities for regulators and market participants alike. Such changes may also allow better protection of the marketplace, with greater integrity and transparency.
Over time, regulatory regimes – rules, regulations, statutes, interpretations, and guidance – will also adjust to new technologies, both benefiting the marketplace and advancing regulatory goals.
As one example, the cloud is increasing the ability to meet compliance obligations by allowing compliance to be built into transactions. Moreover, predicated on the vision of real-time regulatory reporting, and given the pace of technological change in the marketplace over the last several years, various regulators have been using more advanced analytics. This trend will continue to help them more effectively and efficiently meet their objectives, and monitor and meet the expectations they have for the entire market.
Machine learning’s role in the financial markets
Google Cloud’s head of AI and Industry Solutions, Andrew Moore, said that ML will be doing three key things for us in the next 10 years: giving us meaning, providing concierge services, and serving as a guardian. Extracting information that is critical to investor decision-making can be extremely important. With more data than ever, ML can increase the ability to process it while also becoming more accessible in the cloud and better supporting regulatory objectives.
The technology will likely manifest in trading and anti-money laundering activities as they relate market functions, as well as managing a wide variety of risks – supporting the interests of both investors and regulators in terms of decision-making, surveillance, and protections.
Rather than taking individuals out of the equation, the digitization of markets, assets, and guard rails combined with ML will allow people to focus their expertise in different ways to achieve key objectives.
Building the market foundation for the future
The goals of operational resiliency, security, and privacy will continue to be critical for building the market foundation for both participants and regulators. While technology promises to create advantages in concrete, tangible ways, it will be important to scrutinize potential risks and concerns.
Priority one for technology providers is to build an environment of trustless security, including encryption at motion and encryption at rest, ensuring that markets are operationally resilient while instilling confidence for any exchange that runs on top of that infrastructure. Multicloud architectures and approaches are likely also to be part of the solution for operational resilience.
Throughout time, liquidity has been the outcome of improved access, transparency, and security. Technology providers are responding by sharing both the responsibility for, and fate of, the markets of the future to build an efficient, faster, and more transparent and secure financial industry.
You can learn more about our approach in our newest white paper, Building the financial markets foundation for the future.
AI in Manufacturing Already A Mainstream: Google Cloud Study
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While the promise of artificial intelligence transforming the manufacturing industry is not new, long-ongoing experimentation hasn’t yet led to widespread business benefits. Manufacturers remain in “pilot purgatory,” as Gartner reports that only 21% of companies in the industry have active AI initiatives in production.
However, new research from Google Cloud reveals that the COVID-19 pandemic may have spurred a significant increase in the use of AI and other digital enablers among manufacturers. According to our data—which polled more than 1,000 senior manufacturing executives across seven countries—76% have turned to digital enablers and disruptive technologies due to the pandemic such as data and analytics, cloud, and artificial intelligence (AI). And 66% of manufacturers who use AI in their day-to-day operations report that their reliance on AI is increasing.
The top three sub-sectors deploying AI to assist in day-to-day operations are automotive/OEMs (76%), automotive suppliers (68%), and heavy machinery (67%).
In fact, Bryan Goodman, Director of Artificial Intelligence and Cloud, Ford Global Data & Insight and Analytics shares, “Our new relationship with Google will supercharge our efforts to democratize AI across our business, from the plant floor to vehicles to dealerships. We used to count the number of AI and machine learning projects at Ford. Now it’s so commonplace that it’s like asking how many people are using math. This includes an AI ecosystem that is fueled by data, and that powers a ‘digital network flywheel.’”
Moving from edge cases to mainstream business needs
Why are manufacturers now turning to AI in increasing numbers? Our research shows that companies who currently use AI in day-to-day operations are looking for assistance with business continuity (38%), helping make employees more efficient (38%), and to be helpful for employees overall (34%). It’s clear that AI/ML technology can augment manufacturing employees’ efforts, whether by providing prescriptive analytics like real-time guidance and training, flagging safety hazards, or detecting potential defects on the assembly line.
In terms of specific AI use cases called out by the research, two main areas emerged: quality control and supply chain optimization. In the quality control category, 39% of surveyed manufacturers who use AI in their day-to-day operations use it for quality inspection and 35% for product and/or production line quality checks. At Google Cloud, we often speak with manufacturers about AI for visual inspection of finished products. Using AI vision, production line workers can spend less time on repetitive product inspections and can instead focus on more complex tasks, such as root cause analysis.
In the supply chain optimization category, manufacturers said they tapped AI for supply chain management (36%), risk management (36%), and inventory management (34%).
In our day-to-day work, we’re seeing many manufacturers rethink their supply chains and operating models to better accommodate for the increased volatility that has been brought about by the pandemic and support the secular trend of consumers asking for increasingly individualized products. We’ll share more on deglobalization in the third installment of our manufacturing insights series.
AI use differs by geography, but not for the reasons you may think
The extent to which AI is already being used today varies quite strongly between geographies, according to our research. While 80% and 79% of manufacturers in Italy and Germany respectively report using AI in day-to-day operations, that percentage plummets in the United States (64%), Japan (50%) and Korea (39%).
It’s tempting to state this disparity is due to an “AI talent gap.” Although the most common barrier, just a quarter (23%) of manufacturers surveyed believe they don’t have the talent to properly leverage AI. Cost, too, does not appear to be a roadblock (21% of those surveyed). Rather, from our observations, the missing link appears to be having the right technology platform and tools to manage a production-grade AI pipeline. This is obviously the focus of our efforts and others in the space, as we believe the cloud can truly help the industry make a step change.
Looking ahead: The Golden Age of AI for manufacturing
The key to widespread adoption of AI lies in its ease of deployment and use. As AI becomes more pervasive in solving real-world problems for manufacturers, we see the industry moving away from “pilot purgatory” to the “golden age of AI.” The manufacturing industry is no stranger to innovation, from the days of mass production, to lean manufacturing, six sigma and, more recently, enterprise resource planning. AI promises to bring even more innovation to the forefront.
To learn more about these findings and more, download our infographic here and our full report here.
Research methodology
The survey was conducted online by The Harris Poll on behalf of Google Cloud, from October 15 – November 4, 2020, among 1,154 senior manufacturing executives in France (n=150), Germany (n=200), Italy (n=154), Japan (n=150), South Korea (n=150), the UK (n=150), and the U.S. (n=200) who are employed full-time at a company with more than 500 employees, and who work in the manufacturing industry with a title of director level or higher. The data in each country were weighted by number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.
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How McKesson Gains Insights by Running SAP on Google Cloud
McKesson, a 185-yeal old, $200 billion, Fortune 6 pharmaceuticals and health information technology company, with over 80,000 employees migrated their SAP solution to Google Cloud for advanced healthcare analytics.
With changing consumer expectations, the company needed to change its architecture to be able to better serve its customers. And the old on-premise infrastructure was hindering the company from being able to meet those expectations.
Watch this video as Andrew Zitney, SVP and CTO at McKesson, explains how SAP on GCP helps the 180-year old company modernize and meet the changing expectations.
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Google Cloud Helps DSW Engage Over 28M Shoe Lovers in Real Time
DSW Shoes turned to Google Cloud and Google Cloud Partner – Slalom to develop a realtime, engaging loyalty program that serves more than 28 million active members instantly.
The major move from on premise to a cloud-based, data-driven platform that offers speed, flexibility, and scalability has helped increase DSW’s new customer rate by 9% and allows the company to achieve a best-in-class retention rate.
Watch the video to understand how DSW Shoes did this.
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