Spending on public cloud services is Expected To reach $1.1 trillion by 2026, up from $531.7 billion this year, according to IDC. But as the use of cloud services expands, organizations are having a harder time tracking exactly how much they spend on computing.
Statista Reports About 82% of companies find managing cloud spend a “major” challenge today. Self-estimated cloud spending is 28% for the year, for every Flexera – down from 32% a year ago. However, the need to optimize costs and reduce waste continues, especially with the growing appetite for computationally heavy technologies such as artificial intelligence.
The cloud management dilemma has given rise to a new class of startups building solutions to monitor and optimize compute spending. Underscoring the demand for such solutions, a spend optimization startup, externalToday it closed a $15 million Series A round led by Celesta and Cambium Capital with participation from Alpha Intelligence Capital.
Tony Shakib, who was recently named CEO of Exostellar, said the new tranche values the company at $40 million.
“The broader slowdown in technology has presented greater opportunity for Exostellar technology, as companies focus on reducing cloud infrastructure costs,” Shakib told TechCrunch in an email interview. “As a result, the company is in a great position to capitalize on trends.”
Exostellar, based in New York, was launched in 2018 by Cornell computer science faculty Hakeem Witherspoon and Robert Van Rennis, along with former Ph.D. Researcher Zhiming Shen, who is now CTO of Exostellar.
Exostellar attempts to dynamically allocate and move workloads in real-time between cheaper cloud infrastructure. The software is not application-based, and is designed to work alongside other popular resource management tools, such as Slurm.
At a high level, Exotanium monitors variables like the current spot instance pricing for a given cloud provider — just AWS at the moment — to predict when the provider might turn off an instance. (Spot pricing provides a discount on compute for the risk of reallocating that compute to another customer as overall demand increases.) When a spot instance shutdown appears imminent, Exotanium temporarily moves the workload to a more expensive instance, a standard-rate cloud instance.
Exotanium also attempts to consolidate instances to the minimum viable number, automatically adjusting the size and power of instances to work with the current workload.
“Exostellar technology significantly reduces time to market for its customers by increasing the utilization of their cloud infrastructure without increasing their cloud spending,” Shakib said. “By eliminating the trade-off between on-demand, reservation, and spot instance pricing, Exostellar enables organizations to get the cheapest cloud pricing without long-term financial commitments.”
Exostellar doesn’t lack competition in the cloud spend management market, also known as FinOps, which is set to grow from just under $1 billion this year to $2.75 billion by 2028, according to Exostellar. Recently analysis.
Shakib listed a few vendors he considers competitors: Netapp-owned Spot.io, Cast AI, VMWare’s CloudHealth, Apptio, nOps, and Zesty. Zesty recently secured $75 million for its technology that leverages AI to automatically adjust cloud storage and compute to save costs, while Cast AI secured $20 million to grow and further develop its platform to optimize cloud usage.
To stay ahead, Exostellar — whose customers include Astera Labs, Synopsys, two U.S. Department of Energy (DoE) laboratories, Argonne National Laboratory and Idaho National Laboratory — plans to bring its platform to additional public cloud platforms including Azure, Google Cloud and IBM Cloud and offer support for GPU instances . (Currently, Exostellar only supports CPU instances.)
“Although the pandemic has created challenges, it has also created opportunities,” Shakib said. “With most organizations operating entirely online, demand for cloud application servers has reached an all-time high, driving demand for Exostellar technology.”
To Shakib’s destination, 2021 vote Anodot, a cloud cost management and business monitoring startup, found that 91% of companies have their IT infrastructure in the cloud and 50% of them plan to move additional workloads there. Nearly half of respondents cited over-provisioning and fragmentation of cloud assets between teams and vendors as reasons for their wasteful cloud spending, illustrating Exostellar’s growth opportunities — if competitors don’t get in the way, of course.
Exostellar, which has offices in Santa Clara as well as Ithiaca, has raised more than $20 million so far, excluding $2 million in grants from the Department of Energy and the National Science Foundation.