Red Ventures Accelerates Cloud Migration with Data-Driven Decision Making

Red Ventures gained enhanced insight for better decision-making and aligned technology spending with its business by using solutions from Amazon Web Services (AWS) Partner Apptio. By implementing Apptio Cost Transparency and Apptio Cloudability, Red Ventures—a portfolio of digital businesses that works to connect consumers and brands in various industries—improved its use of Amazon EC2 Spot Instances, Amazon EC2 Reserved Instances, and nodes and gained better cost transparency and business value insight. Now Red Ventures can adapt to marketplace disruptions and is poised to pursue new opportunities.

For Red Ventures, a portfolio of digital businesses that works to connect consumers and brands in various industries, technology is a part of every customer experience. As a result, information technology (IT) is one of the organization’s largest cost categories. When Red Ventures began driving exponential growth with acquisitions that took the company into new industries and regions, it needed to identify and accurately allocate business-wide technology costs that were siloed in different systems across the business—even while migrating its entire IT environment to the cloud, including on AWS. The company also needed a common language for communicating IT spending among leadership. Red Ventures looked to Apptio, an AWS Partner, for solutions to achieve these goals.

Founded in 2000, Red Ventures builds integrated marketing campaigns and ecommerce experiences tailored to consumer preferences, connecting buyers with the brands and services they need and helping them make informed purchasing decisions. With more than 3,000 employees and a rapidly growing contingent of technology engineering talent, the company has offices in the United States and the United Kingdom as well as in São Paulo, Brazil, to serve its customers.

The leadership of Red Ventures faced a common set of challenges: managing the cost of goods sold, improving efficiency, and making accurate strategic decisions. Unable to get a complete picture of its IT spending through spreadsheets and manual processes, Red Ventures realized it needed an IT financial management solution that would provide better insight into consumption and cost transparency. To support these goals, the company turned to Apptio.

Apptio provides cloud-based IT financial management software, helping business leaders connect technology investments to business outcomes. In July 2019, Red Ventures implemented Apptio Cost Transparency, a software-as-a-service solution purpose built for technology leaders and available in AWS Marketplace, to inform migration decisions and Apptio Cloudability (Cloudability) to allocate and govern cloud costs. “The output of the work of our engineers and technologists is the output of our company,” says James LaPlaine, Strategic Advisor and former Chief Technology at Red Ventures. “Understanding the costs to build technical solutions means we can make the right business decisions about which markets to go after and where to expand our services.”

Red Ventures wanted to improve its decision-making on cloud compute capacity and choosing instance types. The company uses Amazon Elastic Compute Cloud (Amazon EC2), a web service that provides secure, resizable compute capacity in the cloud. Red Ventures uses Amazon EC2 pricing options such as Amazon EC2 Reserved Instances, which provide a significant discount (up to 72 percent) compared to Amazon EC2 On-Demand Instances and provide a capacity reservation when used in a specific Availability Zone. It also uses Amazon EC2 Spot Instances, which let users take advantage of unused Amazon EC2 capacity on AWS and are available at up to a 90 percent discount compared to On-Demand Instance prices.

Red Ventures has improved its use of Spot Instances, Reserved Instances, and nodes by implementing Cloudability. Using Cloudability’s deep tagging features and analytics, the Red Ventures team can group cloud resources into meaningful buckets, identify untagged resources, and drill down into consumption statistics, providing the information necessary to make informed decisions. Through tagging, Red Ventures now automates turning off nodes and equipment during nights and weekends when they’re not in use. “Having a good tagging strategy is important to us,” says LaPlaine, “so we can pull up information and see what is there. We’re now making better decisions on things like buying Reserved Instances from AWS or when to use the Savings Plans model—how much capacity we commit to versus how much we need as variable.”

Using Cloudability gives Red Ventures a system that enables it to allocate costs to business units. Within three months of using Cloudability, Red Ventures allocated 92 percent of its cloud costs on AWS to its business units. Using Apptio, Red Ventures has also gained a common language for communicating about IT costs across the business, which has helped foster accountability for spending and opened up new conversations about IT value. “To us, success is providing a better understanding of the value of technology to our nontechnical leaders,” says LaPlaine. “It’s a way to show our business leaders how technology supports our business initiatives. And then, the real benefit is to see them use that information to make better decisions around technical solutions that make us a more productive and effective company for our customers.”

Better cost transparency and business value insight has enabled Red Ventures to adapt to disruptions—such as those resulting from the COVID-19 pandemic—and to pivot toward new opportunities. “To me, transparency is a core pillar,” says LaPlaine. “If you don’t know what something costs, you will use it inefficiently. Apptio helps us provide the right level of transparency wired directly to our general ledger, along with a language to communicate consumption metrics to our business leaders.”

Red Ventures continues to look for new ways to use its newfound agility and is looking forward to extending the benefits it has seen using Apptio to other systems.