 We are starting a monthly series here called TFI Topic of the Month aka T3M. I like short names, acronyms. And the topic for the month of January was cost cutting versus cost efficiency. As you know as we walked into 2023, we saw major cost cutting measures across industries which included better control on cost as well as trimming down teams which swelled during the pandemic. For this series, I'll be sitting down with founders, CEOs and leaders of the industry to better understand what's going on and what organizations can do to ensure cost efficiency. Today, we have with us Lukas Stentley, CEO and co-founder of Loft Labs. Lukas, it's great to have you on the show. Good to be here Swapnil. Thanks for inviting me again. What are some of the broader trends you are seeing in the market when it comes to cost cutting or as I looked at it, companies becoming more cost effective? We definitely see a lot of focus on cost recently. I mean, it's always been a topic that companies obviously have on their radar but there is a lot more scrutiny now around introducing new services, buying new products, creating a new Kubernetes cluster. Budgets are essentially a lot tighter than they were in 2021 when everything was like growth at all costs and now people are trying to be more economical. So obviously, they're looking at the cost side of this growth as well. And as they are looking at cost side of the growth, how are your technologies enabling teams to become more cost efficient? All of our products, obviously they save you cost. They improve developer productivity. So they make you more efficient but they don't necessarily, if you have a big Java application, it's not like we make it any slimmer, right? The actual workload is not what we focus on. There are a lot of other companies who focus on that particular topic, but we're essentially concerned about how do you run your Kubernetes infrastructure more efficiently? There's a lot of companies who have a lot of cluster sprawl. They're creating new clusters over and over again or they have massively huge clusters and a lot of inefficiencies in these clusters. And the cluster and our virtualization technology for Kubernetes is one big piece that essentially helps you run Kubernetes more efficiently. So instead of running 300 individual clusters of a lot of redundancies, you can now run one or two clusters and then you have 300 virtual clusters running on top of it. So you have like shared monitoring, shared logging, shared ingress, shared Istio, all of these things can be shared now. And obviously there's a much greater savings potential when you can actually share them. And the big thing about virtual clusters as well is you can turn them off and on again when things are being used or not being used, right? So let's say you have a Kubernetes cluster that is primarily used for development, right? Probably nobody needs that on a Sunday afternoon, right? So how about we turn it off over the weekend, right? A real Kubernetes cluster with all of these monitoring, logging, et cetera, running inside of it is much harder to tear down and spin up again within a day, right? But with a virtual cluster, you can literally do that in minutes because it relies on this shared underlying infrastructure and platform stack. So you can literally have that virtual cluster automatically be spun down while you are going for a lunch break or a two hour meeting, right? And then essentially you're saving all the Kubernetes costs. If you're underlying Kubernetes costs, there's auto scaling enabled, which again is just a couple of clicks and AWS or Google Cloud, et cetera. What are you seeing? What are companies? What are your customers doing to become more cost efficient? Yeah, I think a lot of companies, instead of trying to lay off a bunch of people, et cetera, they essentially, the first step is to have budget in place that are much tighter than they were beforehand, potentially hiring freezers, right? And so IT teams and engineers have to do the same kind of workload, or even more workload, with the same amount of people, right? And in the worst case scenario where you have layoffs, they have to even do it with less amount of people than they were last week, right? And that forces them to essentially focus on efficiency. So they need to find tooling and they need to find ways so their productivity increases. So they can essentially work the same amount of workloads with potentially fewer people, fewer resources, fewer reduced budgets, right? And that's obviously pretty important right now for a lot of companies. And I think our tooling, especially when you look at the developer side of things with Vcluster, it's so easy to spin off virtual clusters. You can create a Kubernetes cluster, dispose of it again. You don't have to worry too much about debugging it if something doesn't work or just dispose of it, create a new one. Same with our tool DevSpace, you can essentially streamline your Dev workflow. So instead of running all these manual commands where it's wasting a lot of time, you can more efficiently build applications directly inside the Kubernetes cluster and obviously increase the likelihood that this will smoothly run later on in production because you've already tested it on Kubernetes. So you're definitely increasing your efficiency that way. And we're not talking about reducing infrastructure cost in this stage. It's really about each individual developer's performance essentially increases with tools like that. And at the same time, the team is more efficient because a lot of like when you look at DevSpace, big part of DevSpace is in a way implicit like knowledge sharing, right? We have so much procedural knowledge if you have, you know, more senior developer, they know so many tricks and things to get around, right? Much faster than a more junior person when you have something like DevSpace, you have actually a DevSpace YAML file in your repository where more senior folks can codify their knowledge and then junior folks can run the same way without actually, you know, knowing all of the details under the hood and that definitely boosts team productivity as well, you know, as a whole. As organizations are taking these measures, how are your technologies enabling empowering them to be with them in this journey of becoming more productive, innovative, of course, safe and secure and just cost efficient? Yeah, one of our customers is Atlan, for example. We have a case study about them on our website that we recently posted there and they essentially run, you know, each one of their customers in a Kubernetes cluster because their application is very cloud-native, their large workloads and containers through their, you know, API or UI. And so each individual customer basically needs their own Kubernetes cluster, which is very, very expensive to run, right? It's very cost-intensive to do that, right? And now that everybody is like so cost-conscious, they are essentially, you know, banking on the cluster to now run their customers inside virtual clusters rather than real clusters. So they literally went down from 100 plus real Kubernetes clusters to just one, right? And then they now have over 100 virtual clusters running on top of it. And that's obviously much more effective. The same counts for the development, right? And development essentially, each one of their devs needs their own Kubernetes cluster to essentially test and build the application. And now they can just spin up virtual clusters, work inside of them, work on different branches, right? Work on new features and all in these virtual environments that cuts cost by a lot. Most customers we see can reduce their cluster virtual cluster by a magnitude of like 40%, right? And that's a big number if you're thinking about, you know, hundreds or even thousands of virtual clusters, which some of the enterprises out there are actually running. That's a huge chunk of cost you can cut off by just running Kubernetes more efficiently with virtualization. What is your advice to companies who are looking at improving performance, productivity, stay innovative and become cost effective? Yeah, I think the first thing is to not lose track of, you know, all the tools and what everybody's purchasing. I think being very considerate about, are we starting to use this resource and where's that catalog eyes, right? Like where can I get an overview of all of the things that we're using, right? A lot of the problems actually with the cloud is, you know, people spin things up and later on they lose track of it or, you know, there's employee churn or someone gets assigned to a different team. And then six months later, someone looks at this and is like, do we still need this load balancer, right? It's just like, it's such a trivial resource in, you know, every AWS account, right? And you're like, where does it point to, you know, is that workload still running? Oh, there's some Kubernetes cluster, what is going on there, right? And I think essentially there's a lot of solutions, you know, that help you create this catalog of things that you own in your cloud provider, but also, you know, overall, like, which services are we running? What is part of which service, tagging strategies, right? Keeping that overview is really, really important so that you can actually go over the things that you may not need anymore, right? Because a lot of infrastructure is just laying around producing cost, not actually being used. And that's a big focus of it, and obviously very, very important in the Kubernetes space. There have been some great projects, which are, you know, steps in the right direction, I would call it, one of them is, you know, Spotify, open source backstage as one of the projects where you can have this like service catalog where you can specify, like, who is working on what and what is part of this service and where can I find it, right? And that definitely goes in the right direction, but obviously there needs to be a lot more automation around like actually pulling in the cloud provider resources, making sure you're running it as efficiently as possible. Lucas, thank you for sitting down with me and discuss this important topic. I appreciate your insights, and I look forward to talk to you again soon. Thank you. Absolutely, it was a pleasure. Thank you, Swapno. Thanks for watching. If you enjoyed our discussion, please don't forget to hit the like button. If you want to be notified when we post our next great interview, please click on the subscribe button and we'll get a mail in your inbox. See you in the next video. Thank you.