Case Study

Instana

Instana optimized its cloud architecture and cut 25% off its cloud hosting bill

This data-intensive software company partnered with The Duckbill Group and identified optimizations in its hybrid environment that contributed to a 25% reduction in its cloud hosting bill in less than a month.

Overview:

  • Client: Instana, Application Performance Monitoring (APM) and Observability for microservices
  • Number of employees: 165
  • Customer growth YoY: 1.5x
  • ARR growth YoY: 200%

Situation

The fast-growing APM software company wanted to optimize spending to support growth, increase margins, and keep fueling innovation.

Solution

Duckbill Group recommended and validated architecture changes that immediately contributed to a 25% reduction in Instana’s cloud hosting costs.

About Instana 

Instana offers an Application Performance Monitoring (APM) and Observability solution that can manage cloud-native microservice applications. Customers use Instana to manage applications and ensure top performance and availability of services throughout their lifecycles. With Applications growing more complex, monitoring them has become more business-critical, but at the same time, more difficult and complex to do well. To meet customer demands for up-time and optimum performance, Instana helps Dev+Ops teams by automatically discovering each component of the Application infrastructure and continuously monitoring the performance of applications and services continuously.

A mandate to streamline operational costs

Instana’s solution captures a vast amount of application data while its customer base is also growing quickly. The company is collecting more and more data from its customers’ environment and, with this, Instana watched its infrastructure and operational costs rise as quickly as revenue.

Fabian Lange, Instana founder and VP of Engineering, took charge of reining in these operational costs — fast. 

“We needed to optimize our margins to drive both innovation and growth,” he said. “We wanted to optimize as many items as we could, as quickly as we could—like in a few weeks.”

The plan: Identify ways to reduce cloud hosting costs

Lange first tackled the ever-growing Amazon Web Services (AWS) bill.

Initially, Lange’s engineering team investigated the company’s AWS cost-optimization issues on their own. They were happy with the progress they were making, but Lange didn’t want this work to remain his team’s top priority. He wanted them to focus on what they do best—product innovation and new feature delivery to customers.

Still, he was concerned that an outside firm, one that didn’t know Instana’s infrastructure as deeply as his team does, would struggle to find any meaningful optimizations and slow the process down.

“Every day we waited to optimize, we burned a lot of money,” Lange said.

Deep expertise in cloud architecture and hosting accelerates time to savings

Lange’s team suggested he reach out to The Duckbill Group. 

“We knew Duckbill’s reputation as the industry experts,” Lange said, “and with their satisfaction guarantee, if they weren’t able to help us, we wouldn’t lose any money.”

Instana hired Duckbill for a fast-paced engagement where everyone immediately got to work on change implementation. The Instana team, with offices all over the world, onboarded Duckbill in a few meetings. The team explained their product architecture, which parts of it could and could not change, and briefed Duckbill on the work they had already completed themselves up to that point. 

For Duckbill, understanding product architecture is key to making useful, money-saving recommendations. “We learned in our first meetings that Instana had hard constraints on the product database,” explained Corey Quinn, Chief Cloud Economist at Duckbill Group. “The application runs in a variety of cloud providers and data centers, which isn’t unusual. So we looked at the components that surround that system and tailored our recommendations accordingly.”

At the start of work, the Duckbill team set up a Slack channel so the internationally distributing team at Instana (mainly US and Germany) could communicate effectively with the Duckbill team and bounce ideas off each other. When Duckbill suggested an optimization change, Lange’s team could implement it right away, immediately saving the company money.

Know when to say when: The value in validating cloud architecture design

The Duckbill team understood Instana wanted to reduce costs where possible, but also knew that the priority of any engineering team is to deliver value to customers in the form of new features and a stable product.

“One of the most important things we offer to our clients is not just advice on how to save money on cloud hosting, but also tell them when to stop hunting for things to cut,” said Duckbill CEO Mike Julian. “There is an upper limit to how much you can save in cloud hosting costs. Engineering teams should spend their time focusing on delivering the right features, which can be worth a hundred times more in revenue than any single cost-savings measure.”

Lange appreciated the architectural validation Duckbill offered—and also the recommendations for change, especially how they were delivered.

“We had very open communication, very direct,” Lange said. “It was really more like having an extended team working together. It never felt like, ‘Oh, you are the external consultancy and you’ll lecture us at the end of the two weeks about what we did wrong,’” he said. “Duckbill was very solution-oriented. Everybody liked working with them.”

“As a result of the cost-optimization work we did with Duckbill, we reduced our AWS bill by 25%—immediately,” Lange said. “While we could have done this on our own, it would have taken much longer and we would have wasted a lot of cash along the way.”Fabian Lange, Instana founder and VP of Engineering

At the end of the engagement, after many of the AWS cost optimizations had already been accepted by the Instana team, Duckbill delivered a written report that detailed all the findings and their recommendations. The team accepted the report in stride, in part because, at that point, they’d developed a close rapport with the Duckbill team. 

“When you’re doing cost optimization and critiquing your architecture choices, it’s easy to make it a blame game and say, ‘Hey, you did this wrong.’  But with Duckbill it never felt that way,” Lange said. “Working with them there was always a little bit of humor in our interactions, and then we’d make jokes about how something perhaps was a stupid idea.

“Duckbill’s feedback was always fair. I couldn’t wish for a better outcome.”

Related: Reducing AWS EBS Volume Cost — Lessons from an Instana SRE


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