The Frugal Architect, Law III: Architecting Is A Series Of Trade-Offs

This is part three of seven in our Frugal Architect blog series. Read part one here, and part two here.

In case you weren’t as giddy as CloudZero was at re:Invent this past year, we wanted to recount the seven laws outlined by Werner Vogels, Amazon’s CTO, which he’s bundled into a framework called “The Frugal Architect” (check out the whole framework here).

What is “The Frugal Architect”? A constitution of sorts for how engineers can build high-functioning, cost-efficient cloud software. A roadmap to sustainable innovation — and, we have to assume unintentionally on Vogels’s part, the vision by which CloudZero was founded and operates.

In this blog series, we’re going to run through each of the seven laws in “The Frugal Architect,” going over what they mean and why CloudZero is the optimal platform to power each.

Law III: Architecting Is A Series Of Trade-Offs

Thus spake Vogels:

In architecture, every decision comes with a trade-off. Cost, resilience, and performance are non-functional requirements that are often at tension with each other.

As the saying goes, “Everything fails, all the time.” Being able to defend against failure means investing in resilience, but performance may pay the price.

It’s crucial to find the right balance between your technical and business needs – to find the sweet spot that aligns with your risk tolerance and budget. Remember, frugality is about maximizing value, not just minimizing spend. And to do that, you need to determine what you’re willing to pay for.

Let’s break it down.

What engineering teams must do: Find the right balance between technical and business needs through frugality: determining what they’re willing to pay for, and maximizing the value of what they do pay for.

Why they should do it: Because when they balance non-functional requirements (cost, resilience, and performance) properly, they maximize the value of their cloud investments.

What it takes:

How CloudZero Helps

Quantify the business impact of different technical investments

Vogels lists “cost, resilience, and performance” as examples of non-functional requirements in tension with one another. In Law I, he adds “accessibility, availability, scalability, security, portability, maintainability, and compliance.” Each of these is a standalone component of software, possibly with a discrete engineer/team working on it. When each component contributes effectively, the result is a cloud-native whole that exceeds the sum of its parts.

To contribute effectively, each non-functional requirement needs the appropriate level of dedicated investment.

So, the question becomes: How much do we need to invest in [non-functional requirement 1] versus [non-functional requirement 2, 3, 4, 5 … ]?

And also: How much are we currently investing in [non-functional requirement 1] versus [non-functional requirement 2, 3, 4, 5 … ]?

And finally: How can we safely shift our current investment toward our ideal investment? What, specifically, needs increased or decreased investments — and who’s responsible for executing those changes?

The twin engine of CloudZero’s value is showing you: 1. What you’re spending money on in the cloud; and 2. How much business value those expenditures are driving. 

It’s how Hiya, a global spam blocker and caller ID software company, quantifies the business value of different global regions, and projects the value of new geographical ventures. It’s how LawnStarter learned they could switch to less expensive S3 instance types and cut their storage costs by 55% — without sacrificing other non-functional requirements. It’s how HighRadius changed their EBS volume storage policy (among other things) to improve their Cloud Efficiency Rate (CER) by 5% against projections.

(Read all of our customer stories here).

Every engineering decision is a buying decision; every technical change has a business impact. CloudZero’s essential function is to quantify the business impact of technical decisions, and show you how to maximize the efficiency of every decision you make in the cloud.

Make frugal (i.e., value-maximized) cloud investments

The first wave of cloud cost optimization centered on reducing spend. There was little to no visibility offering, and as a result, short-term reductions were largely wiped out by longer-term issues: an inability to trace the sources of runaway cloud spend, a lack of economic pressure to get serious about tracing it, and a tacit tolerance for cloud inefficiency.

In the early 2020s, as capital got more expensive and optimization pressure mounted, this mindset of cost-agnostic engineering expired. Cloud-native companies needed to reduce their cloud costs, yes, but more than that, they needed to set up systems to keep them efficient far into the future.

Building too cheaply would endanger their value offerings. Building too expensively would endanger their bottom lines. They needed a platform to help them build frugally.

Take it from HighRadius: “[CloudZero] helps us to be frugal and not cheap — and we get jazzed up for the next sprint,” said Simran Singh, assistant vice president of cloud engineering.

Take it from Demandbase: “We obviously wanted to lower [cloud costs], to get OpEx, COGS, and cost per customer/tenant under control,” said Micheal Waltz, senior manager of cloud engineering. “But we needed to do it without sacrificing performance or customer value. Whatever changes we made needed business context — they had to be informed by and measured against business goals.”

Take it from any number of other cutting-edge software companies whom CloudZero guides along the road of cloud efficiency.

The Joy Of Frugality

We distinguish ourselves from first generation solutions by taking cloud costs seriously — that is, as a business investment, not just an area to slash and burn. We distinguish ourselves from all others through our maniacal devotion to visibility and unit economics, and the belief that visibility leads to the most valuable optimization of all: engineering-led optimization.

There’s much more to the Frugal Architect framework, and there’s much more we have to say on the subject. Stay tuned for four(!) more exciting new articles in this series.

Author: Dustin Lowman

Dustin Lowman, a FinOps certified practitioner, takes no small pleasure in applying his English major’s sensibility to the SaaS world. Dustin also writes, performs, and records original music, and has never met a cardigan he didn’t like.