“…It’s up to the technology team to find ways of pushing down cost. Zesty helped us improve our gross margin by double digits.”
“Honestly, the thing that I like best about Zesty is that it does what it claims to do.”
“We chose Zesty because of the significant savings that we could achieve with absolutely minimal effort involved.”
“I was wondering whether it could reach that 90% threshold of coverage which it did, and right now, we’re at the 99% threshold of coverage which is wonderful.”
Nylas provides a developer software program that helps to quickly and securely build email, scheduling, and work automation features into applications. The embedded features provide companies with communications data from their users, pre-built workflows that automate manual tasks, UI/UX components for easy front-end development, and security capabilities all of which are integrated through APIs. The company is based in San Francisco with offices across the USA and Canada. It has around 400 employees, with 160 people in the product and engineering teams.
Improving RI (Reserved Instances) coverage to lower the cost of unpredictable traffic hot spots.
With Zesty, Nylas surpassed a 99% threshold of coverage, resulting in seven figures worth of savings and a two-time improvement to gross market calculation.
Low RI coverage due to unpredictable traffic hot-spots
A large proportion of Nylas’ cloud operations is on AWS, using load balancers to coordinate sporadic and unpredictable traffic. Email accounts integrated with their product APIs are distributed across instances. With time they noticed that there were moving traffic ‘hot spots’ where some email accounts experience a large volume of communications at changing points in time. The auto-scaling group would automatically spin up new instances to meet these increases in demand, however, the volatility made it difficult to apply static allocations of discounted commitments.
Nylas was manually procuring EC2s through 1-year standard RIs, which at its worst entailed over $1 million spent per month, leaving a lot of dollars wasted because the deeper discount of 3-year RIs was too much of a high-risk commitment. Their coverage levels were at about 60%, leaving over a third of their instances On-demand. While this gave the flexibility for their workloads to contract and expand, they were losing out on about 50% of savings as a result. Nylas enlisted Zesty’s services so they could leverage bigger RI savings, but have the flexibility to elastically expand application servers over time.
Efficiently covering more workloads without over-committing
Before Nylas started using Commitment Manager for the automated procurement engine, they used the built-in visibility and monitoring features to benchmark their performance at covering compute costs. With the insight into how much they were covering on their own, they could effectively assess how much more they could cover with Zesty.
Using Zesty saved them from writing their own code to automate the buying and selling of commitments. While Nylas considered developing the ability in-house, the time this would consume combined with the expense of hiring skilled developers who are able to write the specific type of code required, made this unfeasible. The comparison cost to deploying Zesty became a “no-brainer”. Zesty has the distinct advantage of being able to obtain more cost-effective commitments by leveraging its purchasing power to get the best prices in the AWS RI marketplace.
To ensure the solution was going to deliver as promised, Nylas’ SRE team analyzed the AWS cost reports and confirmed there were no anomalies with the data presented on the Zesty dashboard. After having deployed the solution in December 2021 they watched the coverage gradually increase from the 60% mark they were already achieving to the 85-90% mark and then continue to exceed expectations to reach 99% coverage.
A turn-key solution that reduced EC2 costs by 49%
The SRE team found a gradual increase in savings. At first, these savings were minimal, however, week after week, the number of servers being covered rose, going from hundreds of dollars saved to hundreds of thousands of dollars, elevating Zesty to a serious product with serious value.
As a SaaS company, these EC2 savings have tremendous value as they powerfully impact their growth market capitalization. By dramatically reducing the cost involved to serve their customers, Zesty was instrumental in helping Nylas expand its growth margin by double digits.
Yotpo is a leading E-commerce marketing platform that provides advanced solutions for customer reviews, visual marketing, loyalty, referrals and SMS marketing. They help thousands of e-commerce companies accelerate their brand loyalty and consumer growth. With a $1.4 billion valuation, Yotpo has thousands of global customers and 600 employees worldwide.
Yotpo launched into the Australian market at the end of 2021 following a multi-year platform collaboration with e-commerce giant, Shopify, and a USD$230 million capital raise to drive expansion.
Location: New York, London, Tel Aviv, Sydney
The complexity of forecasting the company’s compute usage was causing engineers to spend a lot of time managing, monitoring, and adjusting cost-saving commitments, but still paying a lot for premium On-Demand Instances.
“It’s completely hands-free and we save 40% each month on our On-Demand costs”
To ensure ongoing production across their user base, Yotpo maintains thousands of AWS EC2 machines on which they run their Kubernetes and Nomad-based applications. Their cloud environment is very dynamic and application needs constantly change as their customer base evolves. This makes the task of buying AWS Reserved Instances three years in advance extremely difficult, forcing them to either buy too many or too few commitments. According to Yair Leshem, DevOps Engineer at Yotpo, “it was impossible to accurately predict and purchase what exact usage is going to be three years out when it’s difficult to predict what it’s going to be 3 weeks out.”
In order to minimize this risk, a lot of time was spent managing Reserved Instances so that they could monitor usage and try to more accurately predict how much future coverage was needed. However, as changes are constant, this quickly became a time-consuming task. Engineers were finding it very difficult to keep up with the scale of managing thousands of computing instances that are each highly dynamic. As a result, Yotpo was using a lot of their instances On-Demand, causing their cloud costs to be very high.
“We are able to focus our time on our clients and not deal with cloud optimization”
95% Reserved Instance Coverage Across All Steady-State Instances
Currently, Yotpo is covering on average 95% of their compute with Reserved Instances. This has cut down their compute costs by just less than 40% equating to hundreds of thousands of dollars every year.
For Leshem, this enormous cost reduction has relieved him and his colleagues from a lot of manual labor that would have otherwise been required. Instead, they are able to focus their efforts on developing Yotpo’s products in line with their client’s wishes, and not get sidetracked with cloud management and optimization tasks. In his own words “We love it”.
Cloud Savings on Auto-pilot
Zesty’s Commitment Manager provides a simple CloudFormation stack that buys and sells Reserved Instances on their customer’s behalf. For Yotpo, this has meant that as they scale down in capacity, Commitment Manager sells their RIs, and when they scale back up, they buy RIs on Yotpo’s behalf.
Commitment Manager achieves this by analyzing the client’s logs on the CUR, CloudWatch and CloudTrail. This real-time data is analyzed and used to train a prediction model based on the specifics of the account. At the same time, the algorithm is analyzing the sale prices of Reserved Instances in the AWS marketplace, so that the most lucrative Reserved Instance discounts can be found. As the client needs more coverage, Commitment Manager grabs very small increments of highly discounted Reserved Instances and as the client uses less compute, these small increments of coverage are shed.
“It’s cloud savings on auto-pilot”