mastering aws and azure reserved instances for savings
TRANSCRIPT
MASTERING AWS AND AZURE
RESERVED INSTANCES FOR SAVINGS
• Kim Weins • VP Cloud Cost Strategy, RightScale
Presenter
• RI overview
• How to buy/manage RIs
• Special considerations for AWS
• Special considerations for Azure
• Comparing AWS and Azure
• Takeaways
Agenda
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Two Ways to Manage Cloud
3
• AWS • Reserved Instances (RIs) • Enterprise Discount Program (EDP)
• Azure • NEW: Reserved Instances (RIs) • Enterprise Agreement (EA)
• Google • Sustained Use Discounts (SUD) • Committed Use Discounts (CUD) • “Negotiated” Discount
Discounts by Cloud Provider
In exchange for the discount you must:
• Commit for 1 year or 3 years • Agree to specific parameters
that limit where the discount can be applied
• Pay up front and/or agree to pay for the RI monthly even if you don’t use it
It’s like buying a gym membership - you pay even if you don’t go.
What is a Reserved Instance (RI)
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A discount “coupon” that will be applied to a running cloud
instance that meets the parameters of the RI you
purchased
RIs Are Not Always the Best Way to Save
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Savings for RI based on m5.large running Linux
in US East.
RI avings will vary based on instance type and
region
AWS RIs Azure RIs
Buying Parameters
Region or AZ Instance family or size
Operating system Network type (VPC, Classic)
Region Instance family Instance size
Scope (Subscription, Shared)
Exchangeable Convertible RIs: Yes
Standard RIs: No Yes
Changeable Standard RIs: AZ (if Regional), Network,
Instance size (if Regional and Linux) Yes, by exchanging or
you can just change Scope
Returnable Can sell on Marketplace
(often impossible to find buyers) Yes - return fee is 12% of
remaining value
Payment Options No Upfront
Partial Upfront All Upfront
All Upfront
AWS vs Azure RIs: Key Differences
• We know I can save, BUT: • I don’t have time to analyze it
• I know I have underutilized instances, so I don’t want to buy RIs on them
• I’m implementing Docker and that will change what I need
• We have Dev instances that are changing all the time
• I need to re-architect that system
• I may need to change my instance sizes
• There may be new instance types coming
• ….and more
The “Buts” of “Committment” Discounts
Seven Principles of Managing Discounts
Think “coverage” % of instances that are covered by discounts
Understand usage How will usage change in future?
Select right coverage level More variability = lower % coverage
Track utilization Track utilization at least monthly
Make adjustments Modify , reassign, or sell
Select right type of discounts Balance length vs. savings vs. flexibility
Regular purchases Evaluate at least quarterly
Example Usage/Cost Pattern
Production and 24x7 dev usage
Weekday dev usage
* Data from real (anonymous) customer use cases
Example Coverage
x% coverage of steady-state
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Example: Target Coverage by Usage Model
Target Coverage: 75-85%
Production
Instances
Target Coverage: 40-50%
Dev Instances
Example: Reserved Instance Utilization
AWS RIs Azure RIs
AWS provides both unblended and blended cost
in the bill and you choose which one to use.
Unblended cost: AWS first applies the RI to the account where it
was purchased. Then if unused, the RI is applied to other accounts under the same payer account
Blended cost: Discount is proportionally shared across all
instances of the appropriate type.
For Azure you choose a Scope of
Subscription or Shared for each RI. You can change the scope.
Subscription scope:
The RI will only be applied in the specified subscription.
If unused in that subscription, you have wasted the RI.
Shared scope:
Can be applied to any instance in any subscription. It may be applied to different
accounts over time.
How RIs are Applied to Instances/VMs
AWS RIS
Sharing RIs Across Accounts in AWS
AWS Payer
Account
Linked
Account
Linked
Account
Linked
Account
Independent AWS
Account
RI
Unblended costs
1. RI will be applied in account where purchased first 2. If no matching instances, it will be allocated to other
accounts in the family
Blended costs
• The savings from the RI gets shared proportionally based on usage of instances that match the RI.
RIs will be shared = more flexibility = higher coverage RIs NOT shared
Set up
consolidated
billing
AWS Reserved Instances:
Standard, AZ
AWS Reserved Instances:
Standard, Regional
AWS Reserved Instances: Convertible
(lower discount)
Buying Parameters
Region + AZ Instance family Instance size
OS Network Type
Region Instance family Instance size
OS Network Type
Region Instance family Instance size
OS Network Type
Automatic changes
None
Applies to any AZ Instance size flexibility: applies to any size in the same family
(vanilla Linux only)
Same as Standard
Manual changes (on request)
AZ Instance size Network Type
Network Type Exchange for equal value
of RIs
Three Types of AWS Reserved Instances
How Instance Size Flexibility Works
xlarge
large
large
medium medium
medium medium
large
medium medium
Original footprint Option 1 Option 2 Option 3
Within the same instance family (eg m3)
…
Instance size Normalization Factor
nano .25
micro .5
small 1
medium 2
large 4
xlarge 8
2xlarge 16
4xlarge 32
8xlarge 64
10xlarge 80
32xlarge 256
Instance Size Flexibility: Normalization Factor
Regional RIs for vanilla Linux have Instance Size Flexibility and can be applied to any size instance in the same family based on the following normalization factor. Example: You buy a RI for m4.xlarge. If no m4.xlarge is running in the region, the RI can be applied to 2 m4.large instances.
Example: RI Coverage for Low Instance Utilization
100 medium instances
100 large instances
RI Coverage 40%
Today 50% of instances have low utilization
Later We’ve downsized instances
RI gets applied to 2x medium instances, coverage now 80%
• Cannot be modified or sold on marketplace
• Can exchange for other Convertible RIs with different configurations
• End date for the RI does not change
• Exchange is based on the prorated list value of the RI
• Must exchange for the same or higher payment option • Ex: Partial Upfront can be exchanged for Partial Upfront or All Upfront.
• Must exchange for equal or higher value • True up for the difference
Understanding Convertible RIs
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Convertible RIs: Convert to Other Families
RI value
$100
RI value
$50
RI value
$50
RI value
$30
RI value
$30
RI value
$30
RI value
$30
RI value
$50
RI value
$30
RI value
$30
Prorated value of RI
Equal trade
Pay $20 true up
Convert RIs to other families based on value
Pay $10 true up
AZURE RIS
Azure RI and EA Discounts are Not Additive
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Your realized savings
from an RI is the
difference between
EA and RI price, not
the published RI
discount off of list.
Your EA price could
be lower than RI
price -- if so, DON’T
BUY the RI.
RIs and Azure Hybrid Use Benefit (AHUB)
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Infrastructure
portion of
cost
No OS
portion of
cost
Vanilla Linux
Infrastructure
portion of
cost
Windows
portion of
cost
Windows
Infrastructure
portion of
cost
Premium OS
portion of
cost
Premium OS
RI discount
applies here
AHUB
discount
applies here
• There’s no such thing as a free ride
• You paid for that Windows license
• For Standard Edition you can use Windows license on-prem OR in Azure
• For Datacenter Edition you can use Windows license on-prem AND in Azure
• Each 2-processor license or each set of 16-core licenses are entitled to two instances of up to 8 cores, or one instance of up to 16 cores. (use fully so you don’t waste the benefit)
• You have to run a Windows Server image from marketplace or use Site Recovery to migrate to AHUB-enabled image
• Once that’s setup, you can flip switch on a VM to apply AHUB or not
About Azure Hybrid Use Benefit
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• Like Convertible RIs
• Not an “automatic” exchange or adjustment
• Make a request from console, it opens a support ticket
• Can exchange for other RIs
• Exchange is based on the prorated value of the RI
Exchanging Azure RIs
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The Challenges of RI Allocation on Azure
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You want to buy RIs centrally and share
across your Business Units
Use: Shared scope
Cons:
● You can’t control which
subscriptions get the RIs
● It may change who gets the RIs
from day today
● It’s hard to “sell” the idea to BUs
because they don’t know how much
benefit they will get.
● You can only figure out how to
allocate out the Upfront costs after
each month is over once you see
how RIs were allocated
You want BUs to buy and get the
benefit of their own RIs
Use: Subscription scope
Cons:
● If a BU has multiple subscriptions,
you need to buy RIs for each
subscription separately.
● If that subscription can’t use the RI,
you can move it or exchange it.
● You have to track RI utilization for
each subscription and make
changes as needed.
SUMMARY
VM Type US
Linux
AWS 1Y Convertible RI
Annual
Azure 1Y RI
Annual
AWS 1Y Convertible RI
Annual /GB RAM
Azure 1Y RI
Annual /GB RAM
Standard 2 vCPU
w Local SSD $597 $508 $75 $64
Standard 2 vCPU
no Local disk $578 $508 $72 $64
Highmem 2 vCPU
w Local SSD $885 $683 $59 $43
Highmem 2 vCPU
no Local disk $788 $683 $52 $43
Highcpu 2 vCPU
w Local SSD $519 $543 $130 $136
Highcpu 2 vCPU
no Local disk $499 $543 $125 $136
AWS vs. Azure with 1 Year “All Upfront” RIs
Source: RightScale As of Nov 17, 2017
AWS
Pros
• Choice of payment options • Convertible and Standard RIs • Better allocation options • Instance size flexibility (vanilla
Linux) • Convertible RIs are changeable
Cons
• Can be more expensive • Not returnable
Pros and Cons
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Azure
Pros
• Lower price in more use cases • Fully changeable • Returnable
Cons
• Must pay All Upfront • Allocation options not good
• RI recommendations from your cloud sales rep will be self-
serving • They want you locked into their cloud
• Consider other savings opportunities
• Consider future changes in cloud use
• Think coverage % • 100% coverage is almost never right
• Carefully plan your RI purchases
• Track utilization and adjust RIs as you go
• Plan for how you will allocate costs
Final Takeaways
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