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Kubernetes is a money pit

Protocol Enterprise

Hello, and welcome to Protocol Enterprise! Today: why most Kubernetes users are spending far more on compute resources than they need to, Google’s hoovering up all the Sidewalk Labs data, and why HashiCorp CEO Dave McJannet thinks you need a cloud platform team.


Cloud customers pay an average three times more on cloud compute costs for AWS, Microsoft Azure and Google Cloud than they should, according to Cast AI. Helping them manage those costs is turning into a business itself.

The startup specializes in Kubernetes automation and cost optimization and reporting for cloud-native applications. Its platform uses artificial intelligence to identify which compute resources are needed for specific Kubernetes workloads and automatically selects the best combinations, configuring CPUs and memory to prevent over-provisioning.

It continuously adds or removes resources as needed, ensuring customers aren’t overspending without compromising workload availability or performance, according to the company.

  • “It's impossible to do this exercise as a human,” co-founder and Chief Product Officer Laurent Gil said. “We decomplexify capabilities. We make Kubernetes or containers serverless by saying we're going to take care of the servers, and we will make the servers cost-efficient.”
  • Cast AI was born out of its co-founders’ frustrations with their cloud bills while they operated a prior startup: Zenedge, a cloud-based, AI-driven cybersecurity startup acquired by Oracle in 2018.
  • “In the beginning of that company, I would spend about $1,000 to $2,000 a month on AWS,” Gil said. “Three years later … that became $2 million dollars — by far the highest cost of the company, and we were very, very frustrated. We had a nice ride with customers, but every time we would add a client, our AWS bill would go through the roof.”
  • AWS’ answer was for Zenedge to prepay for three years to cut its cloud bill by 40%, but Zenedge didn’t want to be locked in, according to Gil. With Cast AI, he and his co-founders built the spending-management product they wished they had at the time.

Companies using Cast AI’s services can reduce their cloud compute spending by 65% on average, according to Gil. Those services work with Amazon Elastic Kubernetes Service, Google Kubernetes Engine, Azure Kubernetes Service and Kubernetes Operations on AWS.

  • “The engine is instantly going to understand what applications you have … and how much compute and memory they currently consume, and how much they cost to run based on the machine that these applications are installed on,” Gil told Protocol.
  • While there are no big differences between the Big Three cloud providers’ prices, Gil said, within each cloud itself, there are cost differences when it comes to processors.
  • “Most … are cheaper with AMD than they are with Intel,” Gil said. “That makes our engine use more AMD sometimes for compute-intensive [workloads]. But the machine has been trained to know this, so we will always select the lowest-cost option.”
  • “One thing that was very surprising to us … is that the average cost-savings we provide to anybody using us … is 65%,” he said.

Read the full report here.

— Donna Goodison (email | twitter)


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Google sucks up Sidewalk Labs’ data (and Doctoroff gets back to future-building)

When Alphabet’s “city of the future” Sidewalk Toronto project imploded in 2020, it was a thud heard around the world. But several data-hungry city tech companies crawled out from under the wreckage and live on today. Sidewalk subsidiaries including “smart” parking company Pebble, energy tech company Mesa and factory-automated timber construction provider Canopy Buildings became part of Google late last year.

Now, the data transfer has begun.

“We are writing to notify you that, on or after June 30, 2022, your information will be transferred from Sidewalk Labs to Google LLC,” stated an email sent to people (including this reporter) who had signed up for updates from Coord, the Sidewalk company now named Pebble.

Expect the data transfer to include a lot more than just names and email addresses, though. Like many of Sidewalk’s offshoots, Pebble wants to digitize city environments. That means new data sets associated with city spaces — What’s on that curb? — to make more efficient use of those spaces, or help delivery companies with that “last mile” problem.

Oh, and a “side” note: When Sidewalk founder and CEO Dan Doctoroff — a former NYC deputy mayor for Economic Development under Mayor Mike Bloomberg, and former CEO of Bloomberg L.P. — announced the Sidewalk reorg in December, he said he would step down from his role with the company, revealing he might have ALS.

At the time, he said he aimed to spend time babysitting his grandkid and “finally learn[ing] to speak French fluently.” Now, just a few months later, he’s back at building the future. Doctoroff has joined a new blue-ribbon panel set up by NYC Mayor Eric Adams and New York Gov. Kathy Hochul to “develop actionable strategies for the resurgence and resilience of the city’s commercial districts.”

— Kate Kaye (email | twitter)

HashiCorp: You probably need a cloud platform team

As COVID-19 constraints eased and allowed for more travel during the last quarter, HashiCorp CEO Dave McJannet and co-founder and CTO Armon Dadgar spent much of the period visiting the company’s Global 2000 customers in person. They heard a consistent theme, according to McJannet: the emergence of centralized cloud program offices or cloud platform teams.

While these platform teams — sometimes referred to as cloud centers of excellence — are prevalent under cloud-native companies, the concept has yet to take off with the majority of the Global 2000, according to McJannet.

“We have this weird perch in the middle of the cloud market as sort of the enabling technology that everybody uses to interface to clouds, so we just sort of sit in the data flow of what everybody's cloud approaches look like,” McJannet told Protocol. “The technical problem of how you run cloud is actually pretty well-understood, but there's actually an organizational transition that we see at all these companies as well.”

McJannet described it in terms of a “cloud 1.0” versus a “cloud 2.0” approach.

“In the cloud 1.0 approach, organizationally, I'd say, 'Hey, go build me an app on Amazon,' and your developers go build an app on Amazon,” McJannet said. “You think you're happy, but 12 months later, you find you way overspent on your Amazon bill, and there's a bunch of applications and the security team is like, 'What are you doing? This is not a private network. This is all running in the public internet. We're going to end up on CNN – stop.'”

That’s where cloud platform teams come in to standardize how developers interface with the cloud and bring greater control in line with policy and governance.

“I’d say for everybody that's adopting cloud successfully, yes, it's super prevalent,” McJannet said. “But I would say most people are still very early in their cloud progression. Every cloud-native company, like a Slack or Stripe, they're all built this way. They have a platform team, and then they have developers. But I would say in the Global 2000, no, it's probably only about a third of them or a half of them that have sort of progressed to that level of maturity yet.”

— Donna Goodison

Around the enterprise

ServiceNow acquired Hitch Works, a company that promises to help management find out which of their own employees have skills needed for important projects, for an undisclosed amount.

Cloud infrastructure services grew 41.4% during the first quarter to $90.9 billion,according to Gartner. AWS remains well in control of the market, but Google Cloud is growing the fastest.


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