How a major UK insurer saved $200k on their cloud bill

The UK insurance sector has been undergoing rapid digital transformation in recent years, with many insurers investing in cloud migration projects to modernise their technologies and the services they provide to their customers. 

The customer

The customer is a major UK insurer which serves over 5 million customers with products ranging from life insurance, to pet insurance and more. Never a stranger to innovation, the company had migrated a significant proportion of their workloads to AWS over the past 2 years but were now facing spiralling cloud costs. 

Cloudsoft was appointed to perform a thorough cost optimisation exercise alongside a Well Architected Framework review of the insurer’s Data and Analytics Platform (DAP). This work was followed up with a suite of improvements to the insurer's cloud operations. 

Cost optimisation

Cloudsoft performed a cost analysis of each AWS service used by the DAP teams, producing recommendations for immediate cost reduction improvements and steps that could be taken to move towards more proactive cloud financial management (FinOps) in the medium to longer term.

When analysing the AWS services in use, it was immediately apparent that around 50% of the monthly bill came from 3 services - AWS Simple Storage Service (S3), Amazon Redshift, and AWS Glue.

We estimated that improvements to the use of these services could save around $215,000 on the insurer’s AWS bill for DAP - around 20% of their annual spend. 

Recommendations

AWS S3 - 80% saving

AWS Standard Storage Service (S3) is “object storage built to retrieve any amount of data from anywhere”. With inbuilt security, compliance and audit capabilities, scalability and a range of storage classes, AWS S3 is one of the cloud-provider's most well-utilised services. 

Cloudsoft’s analysis indicated that the Insurer was not making effective use of these tiered storage classes, with all of their stored objects being held within the standard storage class. This is designed for frequent access, eg critical production data, and costs can be significantly reduced if non-critical data is moved to lower cost storage classes like S3 Glacier or, if the data is no longer needed, deleted. 

AWS S3 accounted for 24% of DAP cloud spend, and we estimated that the insurer could save around 80% of their DAP S3 costs each month by utilising lower cost storage classes, implementing lifecycle policies and exploring intelligent tiering. 

Amazon Redshift - 18% annual saving

Amazon Redshift is a data warehousing service, which uses SQL to analyse structured and semi-structured data across data warehouses, operational databases and data lakes. 

Amazon Redshift costs made up 11% of the bill, but had increased 23% in 3 months in the production environment alone.  

Cloudsoft recommended that the Insurer switch to Reserved Instances for their Redshift clusters to save 18% on their Redshift costs. Reserved Instances are a discount billing method, whereby you commit to a certain level of usage for a number of years in return for a lower unit cost. 

AWS Glue - best practice and improved cost visibility.

AWS Glue is a serverless data integration service which is often used to discover, prepare and combine data for analytics, machine learning and application development. Cost for AWS Glue is driven by the number of Data Processing Units (DPU) consumed, which in the Ireland, eu-west-1 region is $0.44 per DPU per hour. 

AWS Glue makes up 33% of the AWS bill, so judicious cost optimisation of this service could have a real impact on the bill. Cloudsoft identified that AWS Glue costs could be optimised by improving cost visibility and establishing best practices such as cost-conscious architecture and application design in the DAP team. 

We also analysed and provided recommendations for:

• Amazon Cloudwatch
• AWS Config - read the blog on Surprise Config Costs, and how to avoid them.
• Amazon Virtual Private Cloud
• Amazon Relational Database Service
• AWS CloudTrail

The outcome

Cloudsoft was able to identify 20% savings across the board, saving the firm in excess of $200,000 per year on the DAP AWS bill. The team is also adopting FinOps best practices to build, monitor, report and optimise in a cost-conscious way.

Improving AWS operations

During our engagement with the customer we identified a number of opportunities to help them improve their architecture and modernise their processes and use of AWS. This included aspects such as:

• Automation of monitoring to proactively detect slowdowns in systems and databases before they became a noticeable issue to end users.
• Centralising logging and observability tooling
• Improving data quality assessment around dimension such as completeness, accuracy and consistency in their data, allowing for continuous improvement in data quality
• Modernising the data process flows to improve file sizes and formats more suited to AWS and so improve performance and reduce cost.
• Consolidating networking to improve security and reduce cost
• Tagging automation to identify stale resources (aged out by time or lack of interaction / execution), allowing automated clean up processes.

Next steps

Want to see how much you could save on your cloud bill, or how you can optimise your AWS usage with operational improvements?

Book your free consultation with an experienced FinOps certified consultant today. 

Cloudsoft are an AWS Advanced Consulting Partner and FinOps Certified Service Provider. We're proud to deliver expert professional and managed services around cloud migration, modernisation and cost optimisation, helping you drive real value from your cloud investment.