rightscale webinar: decoding aws reserved instances (ris) what it means for cloud pricing
TRANSCRIPT
• Hassan Hosseini • Product Manager, Cloud Analytics
• Kim Weins • VP Marketing
Speakers
• Understanding the New AWS Reserved Instances • Comparing AWS to Google • Breakeven Analysis • Factoring in Future Price Drops
Agenda
What Happened • Quick recap: What is a Reserved Instance
• A commitment from you to AWS to use a resource for a given period of time • For that commitment, you get a discounted price (between 20% - 75%) • You also get a capacity reservation • It is not a VM. It is not a dedicated machine.
• What changed: • Light, Medium and Heavy RIs were discontinued (you could see it coming) • All Upfront, Partial Upfront and No Upfront RIs were introduced – discounts based on timing of payment • All the new RIs are billed 24 hours a day – regardless of whether they are used
• What hasn’t changed: • You still have to commit to an instance type, platform (OS), and Availability Zone • You can request modifications to move AZs or change instance sizes within a family • Terms are 1 and 3 years • Your current RIs
RI Savings Vary
5
RI price points and discounts are different for every region, instance type on OS!!!
No Upfront Partial Upfront All Upfront
Terms Available
1 year 1 year or 3 year 1 year or 3 year
Savings for 1-Year RIs
(Linux)
20-50% 25-58% 27-58%
Savings for 3-Year RIs
(Linux)
N/A 41-74% 45-75%
Hours Billed
24 hrs a day 24 hrs a day 24 hrs a day
Effective Hourly Rate for RIs
On!Demand!
All!Upfront!
$$$!$!
Partial!Upfront!
!
Medium! No!Upfront!
Effective hourly rates of 1-year RIs Linux in US-East
Assumes 100% utilization
________!Heavy!
m3.medium! $.0700!$.0500!
Light!
$.0433!$.0425! $.0477! $.0766!
39% savings
38% savings
29% savings
RI price points and discounts are different for every region, instance type on OS!!!
• You are now committing to the minimum number of instances used. • You are charged hourly rate 24x7 regardless if you are using it • The Effective Hourly Rate and the discounts published by AWS are based on 24x7 usage • If you scale up and down, or turn off instances during weekends and holidays, you need to look closely at
breakeven points. • Example: There are 251 working days in 2014. If you turn off an instance on weekends or after hours, No
Upfront is not worth it. • Combine historic analysis with your knowledge of the future
• Can you commit to an instance type in a specific Availability Zone? • Is you application’s architecture changing? (Dev/Ops team can help here)
• Instance type consolidation is more important • Have a planned approach across your company on instance types and sizes • Consolidation will make it easier to buy and use Ris to get highest discount and minimize waster
• Analysis on underutilized RIs (waste) becomes much more important
Purchasing New AWS RIs
7
• Analyze past usage trends with Cloud Analytics
What and How Many to Buy
8
• Forecasts future usage with Cloud Analytics
What-if Scenarios
9
• How they are applied can be different to how you show/charge back • Here is how they are applied:
• In Consolidated Billing, the purchasing account gets priority • If you have bought the RI at the payer level, then: • The oldest instance gets the reservation till it stops using it, then it goes to the next oldest • The cheapest price is applied from all your reservations
• Here is how you can show/charge back • Un-Blended rate: Show the costs as they are applied (instance 1 in account 1 used it for 3
hours, instance 1 in account 2 used it for 5 hours etc). Deal with the upfront cost too. • Blended rate: Regardless of who used RIs or On-Demand instances, split sum based on
usage.
How RIs are Applied by AWS
10
• Volume Discounts • $500K and above, you will get 5% discount • $4M and above, you will get 10% discount • These are within a region only (e.g. US-East). Discounts do not include Windows with SQL Server.
• Spot • AWS selling their unused servers on an hourly bid price. • If your application can handle an instance suddenly disappearing with no warning, this is an option.
• RI Marketplace • Sell your unwanted Reserved Instances (US only). • You set the upfront fee. This is what you will get if sold (minus 12% service charge). • Cannot sell RIs that you have got volume discounts on. • How long will it take to sell on the marketplace?
• Median of 14-19 days according to Jan 2014 analysis by http://blog.supplyframe.com • RightScale customer – sold all RIs (primarily Heavy) within 2-4 weeks at residual value
• Buy shorter-term RIs
Other Ways to Save on AWS Pricing
11
AWS VS GOOGLE PRICING
12
About Google Sustained-Use Discounts
• No commitment. The more you use an instance family during the month, the higher the discount.
• Hourly rate tiers down as you hit 25%, 50% and 75% of the time in a month.
Usage Level % of Billing Cycle
Incremental Rate % of On-Demand Baseline
Sample Rate n1-standard-1 Total Cost
0-25% 100% $0.07 $13.02
25-50% 80% $0.056 $10.42
50-75% 60% $0.042 $7.81
75-100% 40% $0.028 $5.21
Monthly Cost at 100% usage $36.46
Google SUD uses “Inferred Instances”
14
Source: Google!
• AWS No Upfront RIs vs. Google 100% SUD is closest to apples-to-apples • Comparisons based on:
• US-East Region • Linux operating system • Assumes instances are running 24x7 • No volume discount tiers
• Keep in mind that this is a price comparison only. The specific performance
of each instance might vary. • AWS high-memory and high-CPU instances have more memory along with an SSD, that
balances Google’s lower price. Depending on workload, the high-CPU c3 series from AWS could provide a better price/performance option.
AWS vs Google
15
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Google Instance Type
CPU Cores RAM AWS
Instance Type CPU
Cores RAM Google New On-Demand
(per hour)
AWS On-Demand
(per hour) AWS Price vs.
n1-standard-1 1 3.75 m3.medium 1 3.75 $ 0.063 $ 0.070 +11.11%
n1-standard-2 2 7.5 m3.large 2 7.5 $ 0.126 $ 0.140 +11.11%
n1-standard-4 4 15 m3.xlarge 4 15 $ 0.252 $ 0.280 +11.11%
n1-standard-8 8 30 m3.2xlarge 8 30 $ 0.504 $ 0.560 +11.11%
n1-highmem-2 2 13 r3.xlarge 2 15 $ 0.148 $ 0.175 +18.24%
n1-highmem-4 4 26 r3.2xlarge 4 30.5 $ 0.296 $ 0.350 +18.24%
n1-highmem-8 8 52 r3.4xlarge 8 61 $ 0.592 $ 0.700 +18.24%
n1-highcpu-2 2 1.8 c3.large 2 3.75 $ 0.080 $ 0.105 +31.25%
n1-highcpu-4 4 3.6 c3.xlarge 4 7.5 $ 0.160 $ 0.210 +31.25%
n1-highcpu-8 8 7.2 c3.2xlarge 8 15 $ 0.320 $ 0.420 +31.25%
n1-highcpu-16 16 14.4 c3.4xlarge 16 30 $ 0.640 $ 0.840 +31.25%
Google vs. AWS On-Demand Pricing!
Source: RightScale After GCE price cuts of October 1, 2014
17
Google Instance Type
CPU Cores RAM AWS
Instance Type CPU
Cores RAM Google New 100% Usage
( per year)
AWS 1-year No Upfront RI
(per year) New AWS Price
vs. Google
n1-standard-1 1 3.75 m3.medium 1 3.75 $394 $438 +11.11%
n1-standard-2 2 7.5 m3.large 2 7.5 $780 $876 +12.36%
n1-standard-4 4 15 m3.xlarge 4 15 $1,551 $1,752 +12.99%
n1-standard-8 8 30 m3.2xlarge 8 30 $3,094 $3,504 +13.25%
n1-highmem-2 2 13 r3.xlarge 2 15 $911 $964 +5.77%
n1-highmem-4 4 26 r3.2xlarge 4 30.5 $1,822 $1,927 +5.77%
n1-highmem-8 8 52 r3.4xlarge 8 61 $3,635 $3,854 +6.02%
n1-highcpu-2 2 1.8 c3.large 2 3.75 $491 $639 +30.36%
n1-highcpu-4 4 3.6 c3.xlarge 4 7.5 $981 $1,279 +30.36%
n1-highcpu-8 8 7.2 c3.2xlarge 8 15 $1,962 $2,558 +30.36%
n1-highcpu-16 16 14.4 c3.4xlarge 16 30 $3,924 $5,116 +30.36%
Google Sustained-Use vs. AWS 1-year No Upfront Reserved Instance Pricing!
Source: RightScale After AWS RI model change of December 2, 2014
18
Google Instance Type
CPU Cores RAM AWS
Instance Type CPU
Cores RAM Google New 100% Usage
( per year)
AWS 1-year Partial Upfront
RI (per year)
New AWS Price vs. Google
n1-standard-1 1 3.75 m3.medium 1 3.75 $394 $379 -3.78%
n1-standard-2 2 7.5 m3.large 2 7.5 $780 $767 -1.57%
n1-standard-4 4 15 m3.xlarge 4 15 $1,551 $1,534 -1.07%
n1-standard-8 8 30 m3.2xlarge 8 30 $3,094 $3,051 -1.33%
n1-highmem-2 2 13 r3.xlarge 2 15 $911 $830 -8.85%
n1-highmem-4 4 26 r3.2xlarge 4 30.5 $1,822 $1,660 -8.89%
n1-highmem-8 8 52 r3.4xlarge 8 61 $3,635 $3,320 -8.67%
n1-highcpu-2 2 1.8 c3.large 2 3.75 $491 $554 +12.86%
n1-highcpu-4 4 3.6 c3.xlarge 4 7.5 $981 $1,116 +13.75%
n1-highcpu-8 8 7.2 c3.2xlarge 8 15 $1,962 $2,215 +12.90%
n1-highcpu-16 16 14.4 c3.4xlarge 16 30 $3,924 $4,439 +13.10%
Google Sustained-Use vs. AWS 1-year Partial Upfront Reserved Instance Pricing!
Source: RightScale After AWS RI model change of December 2, 2014
19
Google Instance Type
CPU Cores RAM AWS
Instance Type CPU
Cores RAM Google New 100% Usage
( per year)
AWS 1-year Partial Upfront
RI (per year)
New AWS Price vs. Google
n1-standard-1 1 3.75 m3.medium 1 3.75 $394 $372 -5.56%
n1-standard-2 2 7.5 m3.large 2 7.5 $780 $751 -3.71%
n1-standard-4 4 15 m3.xlarge 4 15 $1,551 $1,503 -3.05%
n1-standard-8 8 30 m3.2xlarge 8 30 $3,094 $2.989 -3.34%
n1-highmem-2 2 13 r3.xlarge 2 15 $911 $813 -10.77%
n1-highmem-4 4 26 r3.2xlarge 4 30.5 $1,822 $1,626 -10.77%
n1-highmem-8 8 52 r3.4xlarge 8 61 $3,635 $3,253 -10.53%
n1-highcpu-2 2 1.8 c3.large 2 3.75 $491 $542 +10.54%
n1-highcpu-4 4 3.6 c3.xlarge 4 7.5 $981 $1,093 +11.43%
n1-highcpu-8 8 7.2 c3.2xlarge 8 15 $1,962 $2,170 +10.58%
n1-highcpu-16 16 14.4 c3.4xlarge 16 30 $3,924 $4,350 +10.85%
Google Sustained-Use vs. AWS 1-year All Upfront Reserved Instance Pricing!
Source: RightScale After AWS RI model change of December 2, 2014
20
Google Instance Type
CPU Cores RAM AWS
Instance Type CPU
Cores RAM Google New 100% Usage
( per year)
AWS 3-year Partial Upfront
RI (per year)
New AWS Price vs. Google
n1-standard-1 1 3.75 m3.medium 1 3.75 $394 $244 -38.22%
n1-standard-2 2 7.5 m3.large 2 7.5 $780 $487 -37.52%
n1-standard-4 4 15 m3.xlarge 4 15 $1,551 $974 -37.18%
n1-standard-8 8 30 m3.2xlarge 8 30 $3,094 $1,948 -37.00%
n1-highmem-2 2 13 r3.xlarge 2 15 $911 $572 -37.21%
n1-highmem-4 4 26 r3.2xlarge 4 30.5 $1,822 $1,144 -37.21%
n1-highmem-8 8 52 r3.4xlarge 8 61 $3,635 $2,288 -37.06%
n1-highcpu-2 2 1.8 c3.large 2 3.75 $491 $362 -26.25%
n1-highcpu-4 4 3.6 c3.xlarge 4 7.5 $981 $733 -25.27%
n1-highcpu-8 8 7.2 c3.2xlarge 8 15 $1,962 $1,466 -25.31%
n1-highcpu-16 16 14.4 c3.4xlarge 16 30 $3,924 $2,931 -25.31%
Google Sustained-Use vs. AWS 3-year Partial Upfront Reserved Instance Pricing!
Source: RightScale After AWS RI model change of December 2, 2014
Things to Remember
• For AWS: • High-CPU and high-mem have more memory and SSD • You can get volume discounts (5% starting at $500K annual RI spend) • You can choose Spot Pricing to save more • You can use RI Marketplace to buy/sell RIs
• For Google: • No commitment • No lock-in to instance types or regions • It’s automatic - no RI purchase decisions • Per-minute pricing (minimum of 10 minutes) • When on-demand price goes down, you get the benefit.
• They’ve lowered On-Demand prices 38% so far in 2014
BREAKEVEN ANALYSIS
22
Calculating Breakeven for AWS RIs
• Breakeven Defined • How long do I need to use an RI for it to be cheaper than On-demand? • This is not a cash-flow analysis, but a cost analysis
• The Impact Upfront Commitment • For all the new-style AWS Ris, you are committing to the full price of the RI upfront – the
only difference is when you actually pay • Unlike old Light and Medium RIs, with new AWS Ris you can’t stop paying the hourly fee
even if you stop using the RI – no walkaway option
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On-Demand 1yr No Upfront RI = 261 days to breakeven (72%) 1yr Partial Upfront RI = 226 days to breakeven (62%) 1yr All Upfront RI = 222 days to breakeven (61%)
Breakeven Analysis for m3.medium (US-East, Linux) for NEW 1-year RIs !
Source: RightScale After AWS RI model change of December 2, 2014
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On-Demand 3yr Partial Upfront RI = 435 days to break even (40%) 3yr All Upfront RI = 409 days to breakeven (37%)
Breakeven Analysis for m3.medium (US-East, Linux) for NEW 3-year RIs !
Source: RightScale After AWS RI model change of December 2, 2014
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On-Demand 1yr Heavy RI = 226 days to breakeven (62%) 1yr Medium RI = 175 days to breakeven (48%) 1yr Light RI = Light COSTS MORE
Breakeven Analysis for m3.medium for OLD 1-year RIs !
Source: RightScale After AWS RI model change of December 2, 2014
IMPACT OF PRICE DROPS
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$0.58 $0.50
$0.45
$0.28 $0.28
Oct 2012 Feb 2013 Nov 2013 Mar 2014 Dec 2014
Cloud Price Drops
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AWS On-Demand Price Drops m3.xlarge US-East Linux
Drop of 51.7% in 26 months Averages out to 23.9% in a year
-10%!
-38%!
-13.8%!
No chg!
Launch!
Are we close to another price
cut?
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Month 1
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On-Demand- 261 days to breakeven OD 24% cut in M7 - 286 days to breakeven OD 24% cut in M1 - 346 days to breakeven 1yr No Upfront RI
Impact of Price Drops on Breakeven Analysis for m3.medium for 1-year RIs !
Source: RightScale After AWS RI model change of December 2, 2014
29% savings
19% savings
6% savings
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On-Demand OD -24% yearly M7 - 515 days to breakeven OD -24% yearly M1 - 638 days to breakeven 3yr Partial Upfront RI - 435 days to breakeven
Impact of Price Drops on Breakeven Analysis for m3.medium for 3-year RIs !
Source: RightScale After AWS RI model change of December 2, 2014
60% savings
42% savings
33% savings
• New instance types are introduced ocassionally • List some • What happens to prices and price/performance • What it means for RIs
What About New Instance Types?
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• T2 launched Jul 2014 • R3 launched Apr 2014 • I2 launched Dec 2013 • C3 launched Nov 2013 • M3 launched Oct 2012
What about New Instance Types?
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$0.58
$0.50 $0.45
$0.28 $0.28
0.68 0.64
0.52 0.48
0.35
Oct 2009 Sep 2012 Oct 2012 Feb 2013 Nov 2013 Mar 2014 Dec 2014
Pricing on Instance Family Changes
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AWS On-Demand Price Drops m1.xlarge to m3.xlarge US-East Linux
Takeaways
• New AWS RIs can save you money, but… • Future On-Demand price cuts can erode the differential • Do your breakeven analysis! • Try to consolidate instance families • Consider selling RIs you can’t use
• Breakeven periods can be significant, so… • Work with your IT team to understand future usage • Think about upcoming instance type changes
• In the Google vs AWS price wars… • Google is getting more aggressive in cuts, backed by deep pockets • It’s unclear if/how AWS will respond over time • Longer commitments to AWS (3 yr RIs) can save you more
Q&A
Try Cloud Analytics 60-day Free Trial www.rightscale.com/analytics Read our blogs on AWS price changes and other cloud pricing topics www.rightscale.com/blog/cloud-cost-analysis