Cloud costs drop 35% with tagging strategy and resource optimization for logistics leader

Published: June 12, 2024

Our client, a prominent logistics company, oversees a vast network of over 500 franchises across Brazil and operates in around 150 countries worldwide. Despite its reputation for exceptional logistics and express freight services, the company struggled with cloud cost visibility. In this story, you’ll learn how a tagging strategy and strategic resource optimization not only enhanced cloud cost transparency for informed business decisions but also led to substantial savings.

The Challenge

Experiencing an annual growth rate exceeding 40%, our client struggled to gain clear visibility into their Amazon Web Services (AWS) costs. This lack of transparency made it difficult to assess whether their cloud expenditure was justified and hindered the accurate allocation of costs to each application. Properly distributing these expenses among the company’s various departments was essential for making informed business decisions, making it imperative to address this issue swiftly.

Our Approach

The journey towards transparency started with a meticulous review of the AWS services that constituted the largest cost contributors. It was discovered that some services were over-provisioned, idle, or remnants from previous implementations and tests. Moreover, a significant portion of resources was not properly tagged, which directly affected the visibility of how AWS costs were distributed among products and clients.

To efficiently size applications, AWS CloudWatch metrics were utilized, gathering data over an adequate period. The analysis considered the use of Graviton processors, which enhanced instance performance and reduced costs. Additionally, more savings were achieved by implementing Reserved Instances and Savings Plans.

One of the most effective strategies involved scheduling non-productive resources to be available solely during the IT team’s working hours, which led to a reduction in computing costs. The flexibility afforded by AWS CloudFormation enabled adjustments in response to the evolving needs of the team.

The Results

An important element of the strategy was the enhancement of cost visibility and control. This was achieved through meticulous identification and a tagging of resources. By leveraging AWS Cost Explorer and AWS Tag Editor, the environment was significantly organized, leading to a more precise allocation of costs across departments and cost centers.

These efforts culminated in a substantial annual cost saving of approximately 35%. This efficiency enabled a proportional distribution of AWS expenses among the various areas and their respective cost centers, fostering a culture of engagement and cost awareness among key business stakeholders. This, in turn, has paved the way for further strategic investments within the company.

Beyond the immediate financial benefits, the company is now prepared to advance its innovation journey, underpinned by the robust governance framework established within its cloud infrastructure. From the outset, the implementations have ensured a well-regulated environment, setting the stage for sustained growth and development. 

This case study stands as a compelling illustration of the significant impact that strategic cost optimization and resource management can have on an organization’s bottom line and operational excellence.

The Challenge
e-Core’s Approach
Results
Difficulty visualizing and justifying AWS costs, affecting budget allocation across departments for a major European logistics player.
Thorough review and tagging strategy of AWS services to identify cost contributors.
Improved cost visibility and control through resource identification and tagging.
Approximately 35% in savings, allowing for better cost distribution and fostering a cost-aware culture among stakeholders.

e-Core

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