AWS Summit 2013 Tel Aviv Oct 16 – Tel Aviv, Israel

Cost Optimization, TCO and ROI

Steffen Krause

Technology Evangelist @AWS_Aktuell skrause@amazon.de

Agenda

1. TCO comparison between cloud and traditional IT

2. How to save money on your AWS bill

3. Customer Spotlight: Time to Know

When Calculating TCO…

AWS lets you pay for only the infrastructure you need… …and only when you need it

On-Premise

(or “Private Cloud”)

Metered, Pay As You Go Model

Use only what you need,

using on-demand, reserved, or spot

Flexible

Capital Expense Model

High upfront capital cost,

high cost of ongoing support

Inflexible

AWS includes everything in the price

Hardware Vendor Offering

3 or 5 Year Amortization

Use 3-Year Heavy RIs

Use Volume RI Discounts

Understand Usage Patterns

Ratios (VM:Physical, Servers:Racks, People:Servers)

Consider Tiered Pricing (Less expensive at every Tier)

Cost Benefits of Automation (Auto scaling,

APIs, TA, Optimization)

DOs

DON’Ts

BONUS

In your TCO analysis

Forget Power/Cooling (compute, storage, shared network)

Forget Administration Costs (procurement,

design, build, operations, network, security personnel)

Forget Rent/Real Estate (building deprecation, taxes, shared services staff)

Forget Virtualization licensing and Software

Maintenance Costs

Forget to mention Cost of “Redundancy”,

Multi-AZ Facility

DOs

DON’Ts

BONUS

In your TCO analysis

Time from ordering to procurement (Releasing early = Increased Revenue)

Cost of “capacity on shelf” (top of step)

Incremental cost of adding an on-premises

server when physical space is maxed out

Real cost of resource shortfalls (bottom of

step)

Cost of disappointed or lost customers when

unable to scale fast enough

DOs

DON’Ts

BONUS

In your TCO analysis

Build Cost-aware architectures Continuous optimization in your architecture

results in recurring savings as early as your next month’s bill

USE ONLY WHAT YOU NEED And pay only for what you use!

When you turn off your cloud resources, you actually stop paying for them

Use only what you need AWS cost savings opportunities

• Right-size – Select appropriate resources – Scale up and down as appropriate – Turn off unused resources

• Payment models

– Flexibility vs. predictability – Mixing payment models

• Measure and manage

– Monitor for saving options

Standard

High-CPU

High-Memory

Micro

Cluster Compute

Cluster GPU

High I/O

High Storage

High Cluster Memory

Most Apps, Low-cost, App

Server / Web Server

Databases, Databases

Databases…

Compute + Network

Throughput

Scale-out Compute, Batch

Processing

For Starters, Low throughout,

Websites

Parallel Processing

OLAP, Hadoop, File

Systems

NoSQL, Best for Random

IOPS

In-memory Apps and DBs.

Best $/RAM

Right-size: broad EC2 selection

Optimize your storage choice too S3 & Glacier

• S3 and Glacier are both: – Secure

– Flexible

– Low-cost

– Scalable: over 2 trillion customer objects

– Durable: 99.999999999% (11 “9”s)

Amazon Glacier

Choosing between S3 and Glacier

• Amazon Simple Storage Service (S3) – Designed to serve static content

• high volumes, low latency, frequent access

– From 5.5¢/GB/Month: 11 9’s Durability – From 3.7¢/GB/Month: 4 9’s Durability (reduced redundancy)

• Amazon Glacier – Designed for long-term cold storage/archiving

• infrequent access, long retrieval times (3-5 hrs)

– From 1¢/GB/Month • But retrieving data is slower and more expensive than on S3

S3 and Glacier tips

• Optimize access – Reduce payload size

– # of accesses (e.g., consolidated logs)

• Monitor for unexpected access/growth patterns – Misconfigured log archiving

• Set Lifecycle Policies – Object expiration dates

– Auto-move S3 files to Glacier

Use only what you need AWS cost savings opportunities

• Right-size – Select appropriate resources – Scale up and down as appropriate – Turn off unused resources

• Payment models

– Flexibility vs. predictability – Mixing payment models

• Measure and manage

– Monitor for saving options

EC2 pricing plans On-Demand

Instances

Reserved Instances

Spot Instances

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: sell RIs you no longer need; buy RIs at a discount

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

Use a spectrum of payment models Frontend Applications

on On-Demand/Reserved Instances

+

Backend Applications* on Spot Instances

* e.g., batch video transcoding

Sample Cash Flow Summary from RI Analysis, Aggregate of Light, Medium & Heavy RIs

The breakeven for RIs is surprisingly quick

• 1yr and 3yr RIs don’t mean that you must keep them 1 or 3 years

• In many cases, you save money way before

Sample Cash Flow Summary from RI Analysis

Other simple optimization tips

• Don’t forget to… – Disassociate unused EIPs

– Delete unassociated Amazon EBS volumes

– Delete older Amazon EBS snapshots

– Leverage Amazon S3 Object Expiration

– Defer batch activity (e.g., Hadoop) to periods when your RIs are regularly underutilized

– (For Enterprise-level support, Trusted Advisor can help with some of these.)

MEASURE AND MANAGE

“If you cannot measure it, you cannot improve it.”

- Lord Kelvin

AWS Monitoring and Management Services

• Detailed cloud monitoring and management – Consolidated Billing (in “Account Activity”)

– CloudWatch (in AWS Management Console)

– Billing Alerts (in “Account Activity”)

– Trusted Advisor (in “Support Center”)

– Other APIs: tags, programmatic access, etc.

• Third-party services are also available

Consolidated Billing

• One Bill for multiple accounts

• Easy Tracking of account charges (e.g., download CSV of cost data)

• Group Activities by Paying Account (e.g., Dev, Stage, Test, Prod)

• Volume Discounts can be reached faster with combined usage

• Reserved Instances are shared across accounts (including RDS Reserved DBs)

• AWS Credits are combined to minimize your bill

CloudWatch to monitor & manage usage

• Monitor your resource utilization – Are you using the right instance type? – Have you left instances idle? – Is your instance usage level or bursty?

• Manage your resource utilization

– Move bursty workloads to other instances – Rebalance your worker nodes – Scale nodes automatically with Auto

Scaling

Use CloudWatch to create Billing Alerts

• Alert when estimated charges reach threshold

• Track an individual developer, or your whole business

• Set up your billing alarm and actions

Trusted Advisor Enterprise Strength Monitoring/Optimization

• Monitors and recommends optimizations for: – Cost – Security – Fault Tolerance – Performance

• Available to customers with Business and Enterprise-level support

http://aws.amazon.com/premiumsupport/trustedadvisor/

Third-party services to optimize your AWS usage

This document and the information set forth herein are the property of Time To Know Limited and are to be held in confidence. Publication, duplication, disclosure or use for any purpose not expressly authorized in writing by Time To Know Limited is prohibited.

Copyright © 2013 Time To Know, Inc.

AWS Tel Aviv Summit Cost Optimization

Rami Levi October 2013

30

The T2K Digital Teaching Platform is designed to promote student acquisition of 21st century skills.

The platform enables the smart and effective generation of localized content using T2K’s smart Content Generation Studio.

Time To Know proven results show higher student achievement levels and stronger motivation for learning.

Time To Know

31

The T2K Digital Teaching Platform is designed to promote student acquisition of 21st century skills.

The platform enables the smart and effective generation of localized content using T2K’s smart Content Generation Studio.

Time To Know proven results show higher student achievement levels and stronger motivation for learning.

Time To Know

32

High hosting costs in traditional computing.

Decentralized management of our environments.

Difficult to predict growth of business and adjust infrastructure and H.W accordingly

Reducing cost while off hours.

Reduce hosting locations to minimum.

Challenges

60K 90K

35K 19K

$0

$20

$40

$60

$80

$100

2010 2011 2012 2013

Cost (K)

Cost (K)

Using AWS at T2K No formal workflow

with AWS

Inefficient use of instances and storage Consolidated billing

Reducing instances and forming work procedures

Multiple zones for fewer clusters

Reducing instances and forming work procedures

Internal tool development using C# SDK for elasticity

Cloud operations optimization (newvem)

Reserved Instances

Joining AWS

34

Elasticity – using the servers when we need – saving costs by more than 40%

Reserve instances - saving our production costs by 38% compared to on demand.

Reducing our investment and space needed on infrastructure and hardware.

Central management for all our environments. Variety of API’s which allow us to develop internal tool for

operational use. Easy scale up. Multiple regions for better user experience. Auto scaling – using auto scaling API’s.

Operational Benefits

35

Using accounts and consolidated billing for easily tracking your bills.

Use CloudWatch and SNS for billing monitoring.

Virtual private cloud – elasticity and easy control of your environment.

Using regions for covering all our potential customers.

Tools for optimizing operation use – like Newvem.

Amazon SDK&API’s – developing internal tool for optimizing operation use.

Best Practices

www.timetoknow.com This document and the information set forth herein are the property of Time To Know Limited and are to be held in confidence.

Publication, duplication, disclosure or use for any purpose not expressly authorized in writing by Time To Know Limited is prohibited. Copyright © 2013 Time To Know, Inc.

SCALE OPPORTUNISTICALLY Opportunity favors the prepared application

Time-to-Result Case 1: Value of result quickly diminishes

Example: Engineering simulation Delay Loss of productivity, project slips

Time-to-Result Case 2: Result is valuable…until it’s not

Example: Weekend regression tests Delay Minimal impact until 8:00AM Monday

Spot Instances for greater savings and scale

• Spot in a nutshell – Spot instances run when Your Bid ≥ Spot Price – Spot instances = Spare EC2 instances – Spot instances might be interrupted at any time

• Benefits – Savings: Up to 90% off On-Demand – Scale: Access up to 1,000s of EC2 instances

• To use Spot – Decide on a bid price – Launch via Console, API, Auto Scaling – Monitor Bid Statuses via Console/API

What applications work on Spot?

• Good Spot applications are: – Delayable: to balance SLA/cost – Scalable: “embarrassingly parallel” – Fault-tolerant: can be terminated without losing all work – Portable across regions, AZs, instance types

• Examples:

– MapReduce (Hadoop, Amazon EMR) – Scientific Computing (Monte Carlo simulations) – Batch Processing (video transcoding) – Financial Computing (high-frequency trading algorithm backtesting) – and many others…

Use Auto Scaling to dynamically scale your app

• Auto Scaling auto-sizes your cluster

– Based on preset triggers and schedules

• Integrates with CloudWatch metrics

• Use Auto Scaling to

– Improve customer experience, application performance

– Maximize CPU/IO/Memory utilization

– Optimize other metrics

Scale with Real-Time Demand

Auto-Scaling Example: Netflix

Follow the Money vs. Follow the Customer

• Optimize utilization – Auto Scale on utilization metrics: CPU, memory, requests,

connections, …

• Optimize price paid – Scale with Spot instances when Spot prices are low

– e.g., Run batch processes off-peak (nights, weekends) when Spot prices are lower

Follow the Money vs. Follow the Customer

• Optimize customer experience with Auto Scaling

• Example 1: Scale resources to meet customer demand – Video service Auto Scales instances to respond to customer web service

requests

• Example 2: Scale resources to ensure fresh results – A scientific paper search engine Auto Scales on queue depth (# of new

docs to crawl) – 10 instances steady state and up to 5,000+ to ensure minimum

throughput time

• Example 3: Scale resources preemptively before large demand – A TV show marketing site scales up before the show and back down after

Conclusion (Part I): Fit the cloud to your product and business model

• Use Only What You Need (and pay only for what you use!)

• Measure and Manage

• Scale Opportunistically

http://aws.amazon.com/architecture/

3. Scale Opportunistically: Auto Scale worker

nodes based on size of input queue 1. Pay Only

for What You Use: Right-size your

cloud resources

2. Monitor and Manage your system

with CloudWatch, Billing Alerts, Trusted

Advisor

AWS Resources

Whitepapers available at http://aws.amazon.com/whitepapers TCO Online Calculator http://aws.amazon.com/tco-calculator AWS Simple Calculator http://aws.amazon.com/calculator

Conclusion (Part II): Use the cloud to create new products & business models

On-Premises

• Failure is

expensive

• Experiment

infrequently

• Less Innovation

Optimized Cloud

• Failure is

inexpensive

• Experiment early

and often

• More Innovation

THANK YOU skrause@amazon.de