Securian Financial Group is a Fortune 500 banking and financial services organization headquartered in Saint Paul, Minnesota. Through its many subsidiaries, the company offers a broad range of insurance, investment, and retirement products and services to 21 million customers in North America. Securian Financial is the ninth largest insurance company in the United States and has been in business since 1880.
Modernizing IT through cloud transformation
For years, Securian Financial maintained a traditional IT operating environment. All applications and data resided on servers in the company’s on-premises data centers. Expenses were managed as capital investments, with operational expenses being minimal. Finances for infrastructure procurement were closely monitored and controlled.
Changes in the financial services market, however, required a new enterprise strategy to meet customer expectations.
“To deliver on the new enterprise strategy, we needed to modernize and simplify our technology portfolio, and look to the cloud to provide new capabilities for our business,” said Aaron Murray, senior manager, cloud center of excellence at Securian Financial.
As a result, the company started a cloud transformation in 2019. The first workload moved to Amazon Web Services (AWS) in 2020 and they plan to complete migrations by 2024. Securian leadership knew that how cloud costs were managed from the start would be a key part of ensuring that this transformation was a success. Some key cost objectives included providing more cost transparency to application and business owners, optimizing infrastructure operating costs, building a team to manage/monitor these costs, and creating optionality and scalability for compute resources.
Moving to the cloud, however, presented some new challenges for managing these costs.
“An important part of our cloud strategy is to ensure cloud usage spend is well managed. To do that, we knew it was important to have insight into how cloud spend tracks and forecasts,” said Murray. “We knew cost optimization was one of the pillars of the AWS Well-Architected Framework, and we knew we needed modern capabilities and a team that would help us with financial management in a multi-cloud environment.”
Murray said this led the company to purchase IBM Cloudability in March 2021. Having already implemented ApptioOne, Apptio’s IT financial management solution, Cloudability was a logical choice because of the product’s multi-cloud capability, support for containerized workloads, and a direct integration with other Apptio products.
“Cloudability provided an easy way to ingest cost data from AWS and future cloud platforms and align this spend to our overall architecture and future cost allocation model,” said Kristen Gemmill, senior architecture consultant at Securian Financial. “In addition, we’re planning on re-architecting a lot of our applications in the future and shifting toward containers. So having the ability to fully integrate these container costs also was a big factor in purchasing Cloudability.”
Murray summarized their decision to purchase Cloudability by saying, “We selected Cloudability because we knew it would help us with our near-term needs and set us up for success going forward.”
Increased visibility leads to optimized infrastructure
According to Murray, the company’s move to the cloud was motivated by the need to offer more functionality and better experiences for their customers. And while cost savings was not a primary driver for the move, the company’s enterprise technology team was motivated to optimize infrastructure operating costs along the way.
“Our goal wasn’t necessarily to save money but to ensure the cloud spend is well managed and take advantage of optimizations available in the cloud,” he said. “And to give our application owners and business owners a better understanding of true cost of ownership so they can make data-informed decisions about the value of their applications.”
Gemmill said Cloudability has helped Securian Financial achieve these objectives through increased visibility of the company’s cloud spend and insight on ways to optimize the new cloud environments.
“Our FinOps team has been able to use Cloudability’s rightsizing feature to show different account owners and engineers scenarios where they have overprovisioned cloud resources and the opportunity they have to optimize,” Gemmill said.
One example of this happened with a recent workload migration. According to Gemmill, she was using Cloudability to understand the costs for this workload and create an estimate for the technology owner of their future cloud costs. By reviewing the costs of what had been implemented, she found that the engineers had provisioned an EBS (Elastic Block Store) volume with a very high IOPS (input/output operations per second) capacity which was very different from what had been implemented in other workloads. “I pointed it out to one of the engineers, and he wasn’t even aware that the team had done that,” she said. “Choosing a less expensive EBS type, with a more appropriate IOPS capacity, lowered the cost of running the workload from $500 per day to about $50.”
Another example, Gemmill said, was being able to show stakeholders how we accumulated over $200,000 of annual savings through changing how we deploy VPCs (virtual private cloud). “Our cloud engineering team created a new pattern of our VPCs that took advantage of centralized VPC endpoints,” she said. “Using Cloudability, we were able to show stakeholders the savings their teams accrued by implementing the updated pattern. After all teams updated our overall VPC, spend dropped $200,000 annually.”
According to Murray, it all comes down to having the information you need to drive better decision making. And that’s where Cloudability is really making a difference.
“We’ve got better insights into what is driving application and infrastructure costs than we’ve had before,” he said. “That allows us to make better decisions. For example, we can now determine the most cost-effective compute and storage options on an application by application basis. We are coming from a one-size-fits-all environment of ‘here’s your one set of storage and compute options’ to a place where teams have optionality to scale the features, performance, and costs of their technology based on business needs.”
Next steps
Securian Financial is at the halfway point of its cloud migration. And while the company has achieved many of its objectives, there is more to be accomplished in the coming years.
One objective is to move to a multi-cloud environment to support certain workloads. A second objective is to expand the use of containers for more applications.
Securian’s IT organization has already experienced some benefits from their cloud financial management discipline and are committed to maturing their practices and teams. This will be done by continuing to collaborate with engineers and application owners, providing guidance on cost management and optimization opportunities, and aiding the company’s overall culture change.
“The goal is by 2024, our account owners and application owners will be accountable for managing their cloud costs, and that’s a big culture change,” Murray said. “This will involve a chargeback for incurred cloud costs. Cloudability can give the account owners and the app owners visibility they wouldn’t have otherwise had, and they would’ve had a very hard time making the required behavior and culture changes without that.”
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