the science of saving with aws reserved instances
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@cloudability
Infrastructure analytics for scaled web businesses and enterprises.
Cloud Cost ManagementAbout Us
$2B+ in tracked cloud costs. 14,000+ Users
Confidential, @cloudability
Dashboards Alerts API AccessReports
Detailed Billing Report Files
We generate custom dashboards, reports, recommendations and alerts
We retrieve your data using read only IAM credentials
AWS provides complex billing and usage data
We organize & analyze your cost & usage data
How It Works
CloudWatch & Usage APIs
(CPU, Bandwidth, Disk I/O)
EC2 APIs (Instance Dimensions,
Reservations)
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Our SolutionsHow It Works
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Spend Monitoring Spending visibility via custom dashboards, budget alerts, and daily email digests.
Cost Allocation Segment your cloud costs with detailed reports by tag, service, usage type, etc..
Usage Optimization Spot under-utilized resources w/ instance level usage metrics.
RI Portfolio Optimization Get recommendations to buy, modify and sell the right RIs. Then see their impact on your spending.
Company-Wide Governance Organizational group views/filtering/rollups, multi-user access.
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How one company came to buy RIs
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1) Wrong people – didn’t involve business stakeholders
2) Wrong data – didn’t use billing data 3) Wrong time – bought based on future plans
They bought the wrong RIs due to…What Went Wrong
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With RIs there’s a technology decision to make as well as a financial one.
- Tech commits to using a certain type of instance at least until the breakeven point
- Business commits to spending a certain amount of money and decides how to deploy capital (now or later)
Bought All Upfront Ris, increasing cash outlay and removing ability to do intra-month waste reporting.
1) Didn’t Involve Business/Finance StakeholdersWhat Went Wrong
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RIs are a billing construct, they are not a technology.
Tech knew they were running RHEL
... but they brought their own licenses so were actually being billed from vanilla Linux by AWS.
As a result their new RHEL RIs weren’t applied.
2) Didn’t Use Billing Data for RI PlanningWhat Went Wrong
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RIs applied each hour and can be changed rapidly.
Tech team expected to move from m3’s to c3’s in a few weeks so bought C3 Ris. ... but the move was delayed by several months.
As a result their new c3 RIs weren’t applied.
3) Bought based on future plans, not actualWhat Went Wrong
๏ @cloudability
(n) RI Czar is a person or team focused on looking at the AWS billing data each month to identify opportunities to increase Reserved Instance coverage.
Why appoint one?
• Proper purchasing of Ris can save 30-60% on your AWS bill
• Assuming a $1M/yr spend there’s a potential savings of $300k+ year.
• Usually is a technically minded person in finance, procurement or vendor management
Introducing the “RI Czar”
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Reservations give you 744 hourly coupons that can applied each hour of the month
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RI Mechanics
What Makes Up a Reservation?
InstanceRI Term RI Type
Instance Family Size OS Location (AZ)
m1 large Linux us-east-1a 1 year No upfront
r3 8xlarge RHEL us-west-2b 3 years Partial upfront
m3 medium Windows ap-northeast-1b 1 year All upfront
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RI Mechanics
The difference is in the payment structure
Upfront Fee Monthly Fee Savings
No upfront NO YES 28.6%
Partial upfront YES YES 38.1%
All upfront YES NO 39.4%
m3.medium:us-east:linux
All RI types are a commitment to pay for full utilization
(even if you don’t use it)
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Reservations in Linked AccountsUnderstanding Reservations
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Reservations in Linked AccountsUnderstanding Reservations
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Reservations in Linked AccountsUnderstanding Reservations
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Reservations in Linked AccountsUnderstanding Reservations
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Reservations in Linked AccountsUnderstanding Reservations
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Instrumentation
Two primary metrics
Green Line: Percentage of hours that are covered by reservations
Red Line: Amount of unused (but paid for) RI hours
Keep tabs on the “Red” Line = Amount of unused RI hours
Month over month total spending on Ris vs. Unused Ri hours
Total Hours
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RI Management
Buying Reserved Instances
1. Walk before you run. First buy should be small and uncontroversial.
2. Focus your budget on high confidence purchases first
3. Focus on the highest savings first
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Confirm the math behind each purchase
When will you start saving?
Why is the purchase needed?
Track impact of buys against goals with Green Line
Green are hours that are running under reservations
Blue are on-demand
Many organizations strive for 80%+ coverage
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Wait. We made a ‘good’ RI purchase last month.
Why didn’t my bill go down?
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Remember: An effective RI purchase drives hourly rates down but increasing
usage may overshadow the savings.
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Modifying Instance TypeUnderstanding Reservations
2xlarge
xlarge xlarge
large large large large
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Modifying Instance TypeUnderstanding Reservations
2xlarge
xlarge xlarge
large large large large
medium medium medium medium medium medium medium medium
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Modifying Instance TypeUnderstanding Reservations
2xlarge
xlarge xlarge
large large large large
medium medium medium medium medium medium medium medium
small small small small small small small small small small small small small small small small
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Modifying Instance TypeUnderstanding Reservations
2xlarge
xlarge xlarge
large large large large
medium medium medium medium medium medium medium medium
small small small small small small small small small small small small small small small small
@cloudability@cloudability
Modifications utilize underused reservationsUnderused
RIs
Currently on-demand
@cloudability@cloudability
Sunk cost of Unused RIs = $744/mo ($0.25/hr * 744) * 4 RIs
Savings from modifications are two-fold
r3.2xlarge hourly pricing
RI 3-year all-upfront = $0.25/hr
on-demand = $0.70/hr
On-demand savings assumes 100% usage
Unnecessary on-demand charge = $2,080/mo ($0.70/hr * 744) * 4 equivalent units
Total savings = $2,824/mo
@cloudability@cloudability
Increase modification opportunities
by focusing on common families and regions
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Reserved Instance Strategy
Typical RI Buying Schedule
28th of the month:Modifications executed
29th of the month:RI Recommendations pulled from Cloudability
30th to 31st of the month:Data is reviewed with stakeholders
1st of the month:Purchase is made
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1) RIs are frequently misunderstood. Train everyone on the fundamentals.
2) RI Coverage changes constantly. Start tracking your Green Line (percentage of hours covered by an RI) and Red Line (cost of unused RI hours) closely.
3) Modifications are powerful and free. Make modifications to maximize use of RIs (easy) when your infrastrucrure changes.
4 ) It’s easy to get distracted. Appoint an RI Tzar and schedule monthly RI management meetings to ensure changes happen.
5) Manage iteratively. Make small, uncontroversial purchases with future modification in mind to keep up with infrastructure changes.
Things to remember (and do) after this presentation
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