cost optimisation on aws
TRANSCRIPT
Bas de Natris
Cost Optimization on AWS
A Couple Assumptions…
1. You’re using AWS…
2. You like it!!
3. But probably want to
spend less
16MM Ledger Saving Velocity = 50 apps/qtr.
Operational CostsWorkforce ProductivityCost AvoidanceOperational ResilienceBusiness Agility
• 98% reduction in
P1/P0’s
• 77% faster to deliver
business applications
• 52% average
TCO savings
• 35% reduction in
compute assets (792)
• 15 automated bots
developed
• 80% cloud first
adoption
• 15 cloud services
created
• 50 applications
decommissioned• 8 cloud migration
parties• Improved security
posture
• Shift to self-service
culture
• Rapid
experimentation
• Reduced technical
debt• 14M YOY Savings
• Improved
Performance
• Streamlined M&A
Activity• DevOps in Practice
Progress as of May 2016
14.2M
InvestmentFocus
18
Months311 Apps
in Cloud &14M YOY
Savings
Sample outcome – GE
http://www.slideshare.net/AmazonWebServices/demystifying-cloud-economics-how-to-build-an-investment-case-for-scale-migration-to-the-cloud-business
AWS Pricing Philosophy
More AWS Usage
More Infrastructure
Economies of Scale
Lower Infrastructure
Costs
Reduced Prices
More Customers Ecosystem
Global Footprint
New Features
New Services
Infrastructure
Innovation
We pass the savings along to our
customers in the form of low
prices and continuous reductions
51+
1.Architect forCost Efficiency„Pay for what Youthink you need“
2. Optimize UsageCosts„Pay for what you use“
3. Take Advantageof Benefitsover Time„Pay for whatyou really need“
Cost Optimization with AWS
Proactively Monitor Your Account Billing Usage…
By Using Detailed Billing Reports and
Enabling Billing Alerts…
Fit your payment model to your business model: EC2 pricing plans
On-DemandInstances
ReservedInstances
SpotInstances
Pay as you go for computing power
Flat hourly rate, no up-front commitments
Pay an up-front fee for a capacity reservation and a lower hourly rate (up to 72% savings)
1-year or 3-year terms
RI Marketplace: Buy RIs with short remaining terms
Pay what you want for spare EC2 capacity: your instances run if your bid exceeds the Spot price
Potential for large scale at low cost: When they’re available, take advantage of 1,000s of Spot Instances at up to 90% savings
10:00
10:05
10:10
10:15
Standard Reserved Instances
• You commit to pay for an instance for one or three years
• We reserve the capacity, and offer you considerable savings over On Demand during theterm
• You decide how you pay:
• No Upfront (Just hourly charges for all hours of the term)
• Partial Upfont (Upfront Payment, plus hourly charges for all hours of the term)
• All Upfront (Upfront Payment only)
Self Service Reserved Instance Utilization Reports
RI „Bucket“
On Demand-
(Usage+ amortizedupfront fee)
More Information: http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/usage-reports.html
• Base Price - On Demand: No Commitment, Pay only what youuse, no capacity reservation but once started no interruption
• 10% less - Scheduled Reserved Instances: Commit toSchedule of at least 1200 hours for one year, capacityreservation
• 30-60% less - Standard Reserved Instances: Commit to one orthree years, capacity reservation
• 40-60% less - Spot Blocks: Bid for 2-6 hours blocks ofuninterrupted time
• Up to 85% less - Spot: Bid for instances, interrupted if marketprice higher than your bid price, 2mins advanced notice
An EC2 Cost Optimization Option for every Need
Combine all the Options!
1. Start by using RIs for
known/steady-state
workloads
2. Set-up multiple autoscaling
groups
3. Autoscale first using Spot first
4. If Spot instances are
unavailable (or priced too
high), use On-Demand
0
2
4
6
8
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
/Spot
On DemandSpotReserved Instance
Trusted Advisor: Enterprise Strength Monitoring and Optimization
• Monitors and recommends
optimizations for:
– Cost
– Security
– Fault Tolerance
– Performance
• Available to customers with
Business and Enterprise-
level support
• Now four checks available
as free tier! http://aws.amazon.com/premiumsupport/trustedadvisor/
“Over the last couple years, we’ve sent more than 2.6 million Trusted Advisor notifications that have saved customers over US$350 million dollars.”
Trusted Advisor: Cost Optimization Tips
Leverage The Right Storage Classes…
AWS Cloud
Amazon Glacier
Gateway Appliance/ AWS Storage Gateway
Amazon S3
Block File
On-premises Data Center
Archive Backup Disaster Recovery
Amazon
EBS
• Amazon S3 Reduced Redundancy
‒ 99.99% durability vs. 99.999999999%
• Amazon S3 Infrequent Access
‒ For data accessed less than two times a
month
• Amazon Glacier
‒ Same durability as S3
‒ 3 to 5 hours restore time
‒ Up to 65% savings
‒ Great for archiving, long-term backups
and old data
• Amazon EBS
‒ SSD, general or provisioned IOPS
‒ HDD, throughput opt. or coldAmazon EFS
1.Architect forCost Efficiency„Pay for what Youthink you need“
2. Optimize UsageCosts„Pay for what you use“
3. Take Advantageof Benefitsover Time„Pay for whatyou really need“
Summary: Cost Optimization with AWS
Intro to Amazon EC2 Dedicated Infrastructure
Comparing Dedicated Hosts to Standard EC2 Instances
Multi-tenant servers host instances for multiple
customers’ workloads
AWS determines which hosts instances run on
You pay per instance
Single-tenant servers host instances for one
customer’s workloads
You can determine which hosts instances run
on
You pay per host
Standard Amazon EC2 Instances Amazon EC2 Dedicated Hosts
EC2 Instance
Customer 1
Customer 3
Customer 5
Customer 2
Customer 4
Customer 6
Customer X
Amazon EC2
Dedicated Hosts
Comparing Dedicated
Hosts to Standard EC2
Instances
Dedicated Hosts give
you license flexibility
Amazon EC2 Dedicated
Instances
Dedicated Infrastructure
payment options
Dedicated Hosts
On-Demand Pricing
Dedicated Reserved
Instances Pricing
Leveraging the power of
the cloud compliantly
Intro to Amazon EC2 Dedicated Infrastructure
Dedicated Hosts give you license flexibility
When running Microsoft Workloads, for example:
Instance-host affinity allows you to comply with the 90 day rule
Per-core and per-socket visibility enables reporting at the physical level
Placement controls ensure that instances run on the server you want them to,
helping you meet stringent compliance and regulatory requirements
AWS Config allows you to record when instances start, stop, or are terminated
for license reporting and true-ups
Amazon EC2
Dedicated Hosts
Comparing Dedicated
Hosts to Standard EC2
Instances
Dedicated Hosts give
you license flexibility
Amazon EC2 Dedicated
Instances
Dedicated Infrastructure
payment options
Dedicated Hosts
On-Demand Pricing
Dedicated Reserved
Instances Pricing
Leveraging the power of
the cloud compliantly
1.Architect forCost Efficiency
2. Optimize UsageCosts
3. Take Advantageof Benefitsover Time
How do customers lower their TCO with AWS?
1
Source: IDC Whitepaper, sponsored
by Amazon, “Quantifying the
Business Value of Amazon Web
Services” May 2015
“Average of 400
servers replaced per
customer”
Replace up-front
capital expense with
lower “pay for what
you use” variable
cost model
3
Periodic Price
Reductions
Economies of scale
allow AWS to
continually lower
costs
4
Save more money as
you grow bigger
Tiered Pricing
Volume
Discounts
2
Pricing model choice
to support variable &
stable workloads
On-Demand
Reserved
Spot
Dedicated
Analysts have shown AWS
reduces costs over long term
Source: IDC, Quantifying the Business Value of Amazon Web Services (May, 2015)
…and that these benefits increase over time
Source: IDC Business Value of AWS Accelerates over time
According to IDC, this relationship between length of time using AWS and return is due to customers leveraging the more optimized
environment to generate more applications along a learning curve.
$1 Investment in AWS
$8.40 in benefits
At 60 Months of using AWS
~8X$3.50 in benefits
$1 Investment in AWS
At 36 Months of using AWS
~3X
Comparing TCO is not easy
(But We’re Going to Try)
≠
Elements of Infrastructure TCO
Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software
costs. Facilities cost can include costs associated with upgrades, maintenance, building security, taxes etc. IT labor costs
can include security admin and application admin costs.
Hardware – Server, Rack
Chassis PDUs, ToR
Switches (+Maintenance)
Hardware – Storage Disks,
SAN/FC Switches
Network Hardware – LAN
Switches, Load Balancer
Bandwidth costs
Server Admin Virtualization Admin
1
2
3
4
Server
Costs
Storage
Costs
Network
Costs
IT Labor
Costs
Software - OS, Virtualization
Licenses
(+Maintenance)
Storage Admin costs
Network Admin Costs
Facilities Cost
Space Power Cooling
Facilities Cost
Space Power Cooling
Facilities Cost
Space Power Cooling
AWS TCO Calculator: Example Cost Savingshttp://awstcocalculator.com