A former Amazon Web Services manager has a plan to help customers manage out-of-control costs when using Amazon's cloud

Apptio

Apptio Chief Product and Technology Officer Scott Chancellor.

• Seattle-area technology business management software company Apptio just inked a big distribution deal with Amazon Web Services.
• Apptio exists to solve a common headache for companies moving to Amazon's cloud, or any other.
• AWS allows users to pay only for the cloud capacity they use - but the complexity of modern software means that it's very common to pay for more cloud infrastructure than they need.
• The deal represents efforts to solve a point of increasing complexity for companies making a digital transformation.
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One of the biggest challenges for companies moving to the cloud is tracking what they spend and making sure they don't buy more computing capacity than they use.

Mega-clouds like Amazon Web Services and Microsoft's Azure allow customers to pay-as-they-go for the servers and software they need to power their IT infrastructure. On paper, that's a great cost savings over a traditional data center approach - but in reality, it makes it easy to lose control of spending.

Managing cloud costs and eliminating waste forces companies to track and analyze massive amounts of data to make sure they're squeezing out the most efficiencies. That's hard for companies to do, especially when they're just starting to adopt new technologies.

The transition becomes even more difficult for companies that not only use clouds like Amazon's, but also on-premises computing resources - a combination often called hybrid cloud.

"A human or a team can't be expected to understand these vast swathes of data, and certainly not to be able to manage it," Scott Chancellor, Apptio chief product and technology officer, said. "By the time you've got a team of eight people trying to wrap their heads around this volume of data, you've already missed the boat and those costs have shot through the roof. You're toast."

Apptio is one of a growing number of companies selling software to help large enterprises manage technology spending, and the Bellevue, Washington-based company just scored a deal with Amazon Web Services to reach more of them.

Apptio, which says it sells its software to 60 percent of the Fortune 100 companies, chose AWS as its preferred cloud provider and AWS will offer Apptio cloud cost management platforms to customers.

The deal - brokered by Chancellor, former head of Amazon's in-house cloud cost management software products turned Apptio chief product and technology officer - represents the increasing complexity for companies making a digital transformation.

Companies are trying to rein in cloud spending

The complexity of cloud spending has created a big opportunity for other companies - Amazon, Microsoft, and Google all offer their cloud customers cost-tracking tools, but plenty of users are looking for more.

There are third-party tools available from companies like Apptio, Dell-owned Enstratius, and Flexera. There's even an entire industry of consultants whose job it is to help companies understand cloud spending and make it more efficient.

Chancellor, for his part, spent seven years at AWS, most recently as the head of the AWS Insights suite of products including AWS Budgets and Cost Explorer, used by Amazon customers to analyze cost and usage data and try to eliminate any unnecessary spending.

Chancellor expects cloud spending management to become even more complicated as new technologies emerge and companies need to analyze greater amounts of data.

"There's a lot more innovation to come in this space," Chancellor said. "All of the rules of the game are being changed around us."

Where AWS fits in

Through the deal, Apptio chose AWS as its preferred cloud service provider. AWS will, in turn, offer Apptio's cloud cost management and hybrid business management applications to its customers.

Apptio's hybrid business management platform helps companies understand and manage complex cloud computing arrangements for companies that use multiple cloud providers or a hybrid mix of public and on-premises cloud resources. Cloudability is a machine learning application to help customers manage cloud spending. AWS will distribute both products to its customers.

For AWS, the deal has important potential benefits. It can help AWS customers manage spending so they stick around and it also makes AWS a more attractive option for hybrid cloud customers, a subset of the market in which Microsoft is generally considered to be a leader.

AWS recently did a major overhaul of pricing for its most popular service to make it easier for customers to save money on its most popular service - and more difficult to switch to competitors like Microsoft Azure and Google Cloud.

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