Strategic Blue
The Cloud Procurement Expert

Dr James Mitchell isn’t going to be a typical attendee at AWS’ upcoming global conference—Re:Invent in Las Vegas. Whilst the vast majority of the 60,000+ attendees are highly skilled technical experts coming to hear about the latest amazing AWS innovations, James’ interests are largely financial. A former originator of structured commodity deals, particularly in electricity, at Morgan Stanley, he founded Strategic Blue eight years ago. James’s team of financial solutions architects, help AWS users to buy cloud computing infrastructure on financial terms adapted from the AWS-standard to better suit the customer’s individual needs. At Re:Invent, James will be talking about billing, financing and risk management, leaving other AWS partners to evangelise the latest technical ways of leveraging the cloud business model. As a former commodity trader, James brings a unique perspective as an Advanced AWS Consulting Partner: “At Strategic Blue, we have the utmost respect for AWS. Few other companies are so relentless in their service to the customer, and even fewer are so fastidious in their efforts to level the playing field for all customers, resellers and partners. AWS quite rightly pushes back on almost all requests for one-off changes, whether that be technical services, contracts, SLAs or pricing and billing arrangements. For the individual customer or reseller that makes the special request, this is frustrating, but this approach makes the platform as a whole more secure, more resilient, more scalable and more cost-effective to the benefit of all. AWS focuses immense, but nevertheless finite resources and relentless innovation on the bigger picture—each of the myriad requirements that apply to large sets of customers, originally developers, then enterprises and today public sector organizations, who are trying to adapt to the AWS-way.

James continues, “Today’s hyperscale cloud providers offer a utility service. In the same way that you expect electricity to be widely available, on-demand, in a scalable, self-service manner, today so is the commercial cloud. Modern utility services are highly reliable, fault tolerant and low cost. AWS is no different, particularly if the Well-Architected Framework has been followed. Again in common with electricity, cloud providers like AWS rightly regard the end customer as interchangeable. No matter what your application is—powering a hairdryer, a kettle or a toaster—the power utility is indifferent and services the needs of the customer, reliably, scalably and at low cost in the same way. The same is true for different software applications running on AWS, the market-leading cloud utility.

When comparing cloud to electricity, one often forgets that adapters are frequently required. A hairdryer with a US plug requires an adapter to be plugged into the power grid in Europe and sometimes a transformer is needed to transform the voltage.

These are technical adapters, and AWS has an army of technical partners that perform the equivalent technical adaptor role for their customers. In the most efficient electricity markets, financial adaptors are widely used too. Consumers buy electricity from suppliers who invoice many retail clients and pay a small number of wholesale counterparties and providers. Those suppliers are financially adapting the large, long-term deals that are offered at the lowest price by providers, into smaller, shorter-term deals that are suitable for an end consumer. Their role is beneficial to the provider, because they forecast future usage, and commit and prepay more to the provider than the consumer would. This is the role that Strategic Blue plays in the cloud market. We are the financial adaptor that allows AWS users, new and existing, to buy cloud more efficiently on deals tailored for their needs.”

Strategic Blue is unlocking the way organizations buy commercial cloud services. While the technical benefits of buying and selling cloud forms the tip of the cloud procurement iceberg jutting above the water, the greater, swollen icy mass below the surface comprises cost engineering, financing and billing complexities. The challenge lies in bridging the gap between how organizations would like to buy and the standardized way AWS needs to sell, to keep their services scalable yet low cost. This is where Strategic Blue steps in with its managed cloud procurement service to make commercial cloud pricing more efficient, benefiting cloud customers, resellers and providers alike.

Procuring Cloud Efficiently

As an AWS Advanced Consulting Partner, Channel Partner, Public Sector Partner, Solution Provider, and AWS Competency holder, Strategic Blue provides a tried and tested financial intermediation model that adapts the financial side of consuming cloud fit with established procurement procedures, whilst saving money.

Strategic Blue reports that some customers see a 40 percent drop in cost initially as pre-existing procurement inefficiencies are stripped out, followed by ongoing savings typically in the 20— 40 percent range compared to on-demand pricing for persistent committable resources. In light of AWS’ sophisticated, but highly complex pricing, Strategic Blue’s assurance to always match or improve upon direct-to-AWS pricing provides certainty that the pricing will always be compelling. Strategic Blue offers assistance to other AWS resellers who sometimes struggle with accurate billing, cashflow management, and managing Reserved Instance (RI) purchases.

“We are willing to share our Cloud Options business model. We routinely collaborate with other AWS resellers to serve their customers better while widening their profit margins,” says James. “Our unique combination of financial and technical expertise, technology capability and access to finance and risk appetite, really make our offering to technically-focused AWS resellers unique.

We can really deliver on the cost optimization pillar of AWS’ Well-Architected Framework.”

Why Strategic Blue?

Along with consulting to enable other AWS resellers to allow them to offer these services, Strategic Blue offers three categories of service to end customers of AWS—Cloud Options, the Blue Review, and Pricing Insights.

Cloud Options offers cloud billing, cloud finance, and price risk mitigation, as a managed service enabling AWS consumers to adapt billing and finance terms, gaining more control over their financial risk.

The Blue Review leverages in-house technology that tracks utilization of Reserved Instance (RI), and stakeholder interviews by financially trained AWS solutions architects. Recommendations around how to buy AWS services more cost-effectively consider the benefits of buying through various resellers, including Strategic Blue, and optimizing RIs purchase strategies. Strategic Blue’s managed service eliminates the usual need to buy, learn and repeatedly check self-service cost-optimization tools, and in conjunction with Cloud Options, even removes the need to directly implement RI purchases.

Finally, with Pricing Insights, customers can answer those awkward cloud pricing questions that can otherwise block decision making, particularly around RI purchases.

Strategic Blue provides services to both corporate and public sector AWS users, generally those who are intensive users of AWS’ core Elastic Compute Cloud (EC2) and Relational Database Service (RDS) services. Strategic Blue’s ability to deal with tailored requirements is what brings customers to them, together with the price guarantee and managed service business model.

Over the years, Strategic Blue has assisted various prestigious clients including CERN, University of California, and the UN Global Platform for Official Statistics with groundbreaking cloud procurement activities, gaining a deeper level of insight into cloud market dynamics than its competitors. These clients are outspoken advocates for Strategic Blue, and its “financial adaptor for cloud” business model. One of our clients, Dr. Vince Kellen, CIO of the University of California San Diego, whose case study was instrumental in helping Strategic Blue achieve its AWS Competency in Education, commented, “At UC San Diego we have a quickly growing number of researchers using the commercial cloud. Each researcher and department has their own set of grants, with different procurement requirements. By partnering with Strategic Blue as our broker we were able to lower costs and provide more flexible billing and usage arrangements that our researchers need, while still lowering costs. As a result, we are setting up an internal Cloud Center of Excellence team that focuses on helping our researchers’ solutions on AWS, while using Strategic Blue for the financial, pricing and billing considerations.”

Strategic Blue aims to make public cloud IaaS budget-friendly and tailor-made, without AWS and similar hyperscale vendors having to compromise on the standardization that underpins low-cost scalability.