Journey through the Cloud:
Cost Optimisation
Ian Massingham – Technical Evangelist @IanMmmm
Common use cases & stepping stones into the AWS cloud Learning from customer journeys
Best practices to bootstrap your projects
Journey through the cloud
Replace up-front capital expense with low variable cost Economies of scale allow AWS to continually lower costs
Pricing model choice to support variable & stable workloads Save more money as you grow bigger
Cost Optimisation
AWS Pricing Philosophy Considerations for TCO comparison AWS TCO Calculator Cost Optimisation Techniques
Agenda
AWS Pricing Philosophy
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
45
Lower costs with AWS
1
“Average of 400 servers replaced per customer”
Replace up-front capital expense with
low variable cost
2
45 Price Reductions
Economies of scale allow AWS to continually
lower costs
3
Pricing model choice to support variable &
stable workloads
4
Save more money as you grow bigger
Tiered Pricing
Volume Discounts
Custom Pricing
On-Demand
Reserved
Spot
Dedicated Source: IDC Whitepaper, sponsored by Amazon, “The Business Value of Amazon Web Services Accelerates Over Time.” December 2013
Lower costs than on-premises
On-Premises Traditional
Data Center
On-Premises Virtualized
Data Center
CAPEX
OPEX
OPEX
AWS
CAPEX
OPEX*
Cost savings from running internal IT more efficiently AWS Scale
• Multiple new data centers built each year • Volume purchasing, highly automated, supply
chain optimisation
Utilization fundamentally higher in AWS cloud • Aggregating non-correlated workloads, scale,
spot market
Amazon specific hardware designs • OEM acquisition of custom servers & net gear • Direct purchasing of disk, memory, & CPU • AWS controlled hypervisor & net protocol
layers
Diagram is not to scale *For AWS, OPEX costs includes Reserved Instances one-time low, upfront payment, if Reserved Instances are used.
Cost savings from moving to a cloud provider
Analysts have shown AWS reduces costs
In early 2012, AWS commissioned IDC to interview 11 organizations that deployed applications on AWS. Since this study was conducted in early 2012, AWS has introduced price reductions nearly 20 times across Amazon EC2 and Amazon S3. IDC estimated what the impact of AWS's fee restructuring would be on the organizations that participated in the 2012 study and determined that the overall fees would drop by 21% lowering the five year TCO from $909,000 to $846,000. Source: IDC Business Value of AWS Accelerates over time
IT PRODUCTIVITY
INCREASE:
52%
5 YEAR TCO SAVINGS:
72%
AWS TCO benefits increase over time…
$3.50 in benefits
$1 Investment in AWS $1 Investment in AWS
$8.40 in benefits
At 36 Months of using AWS… At 60 Months of using AWS…
~3X ~8X
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.
Flipboard Example: Handling objection AWS gets expensive as you grow big…
Considerations for TCO Comparison
Comparing TCO is not easy
≠
Typical cost drivers for on-premises deployments, including overhead costs
Network Costs
Storage Costs
Server Costs
Hardware – Server, Rack Chassis PDUs, ToR
Switches (+Maintenance)
Software - OS, Virtualization Licenses
(+Maintenance)
Overhead Cost
Space Power Cooling
Hardware – Storage
Disks, SAN/FC Switches
Overhead Cost Storage Admin costs
Network Hardware – LAN Switches, Load Balancer
Bandwidth costs
Network Admin costs
Overhead Cost
IT Labor Costs
Server Admin Virtualization Admin
1
2
3
4
Space Power Cooling
Space Power Cooling
illustrative
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.
AWS services pricing includes overhead costs
Hardware Vendor Offering
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔
✔
Server Network Hardware
Software OS + VMs
DC/Co-lo Floor Space
Powering Cooling
Software Defined
Networking
Data Center Personnel
Storage Redundancy
Resource Mgmt. /SW Automation
× × × × × × ×
In Your TCO Analysis Power/Cooling (compute, storage, shared network) Data Center Administration (procurement, design, build, operate, network, security personnel) Rent/Real Estate (co-lo charges, building deprecation, taxes) Software Licensing/Maintenance (OS, Virtualization, DCIM, Automation..) RAW vs. USABLE storage capacity (Usable = ~50% Raw) Storage Redundancy (RAID penalty, OS penalty) Storage Backup costs (Tape, backup software) Bandwidth, Network Gear & Redundancy (Routers, VPN, WAN..)
DON’T FORGET
THINK BENEFITS
Additional investment into new initiatives Reduced Procurement Time, Resource sitting on shelf Cost of lost customers Lower down time, increased productivity
AWS TCO Calculator
aws.amazon.com/tco-calculator/
• From over 40 data centers down to 6 • Planning to migrate 3000 apps by Jan 2015 • Saving $100M over 3 Years
VS
1. Evaluate infrastructure costs & architecture
2. Make business case 3. Enable decision to move to the cloud
Customer Spotlight: Dow Jones Intl.
Find out more here: http://youtu.be/xS8Ha0Q6_CY
Cost Optimisation Techniques
1. Choose the right instance types
Start Choose an instance that best meets your basic requirements
Start with memory & then choose closest virtual
cores
Look for peak IOPS storage requirements
Tune Change instance size up
or down based upon monitoring
Use CloudWatch & Trusted Advisor to assess
Roll-Out Run multiple instances in multiple Availability
Zones
2. Use Auto Scaling Describes what Auto Scaling will create when adding Instances
Only one active launch configuration
at a time
Launch Configuration
as-create-launch-config --image-id ami-54cf5c3d --instance-type m1.small --key mykey --group webservers --launch-config 101-launch-config
Auto Scaling managed grouping of EC2 instances
Automatically scale the number of
instances by policy – Min, Max, Desired
Auto Scaling Group
as-create-auto-scaling-group 101-as-group --availability-zones us-east-1a us-east-1b --launch-configuration 101-launch-config --load-balancers myELB --max-size 5 --min-size 1
Parameters for performing an Auto Scaling action
Scale Up/Down and by how much
Auto Scaling Policy
as-put-scaling-policy 101ScaleUpPolicy --auto-scaling-group 101-as-group --adjustment=1 --type ChangeInCapacity --cooldown 300
Utilization and Auto Scaling: Granularity more small instances vs. less large instances
29 m1.large @ $0.240/hr. = $6.96
59 m1.small @ $0.06/hr. = $3.54
Utilization and Auto Scaling: Granularity more small instances vs. less large instances
29 m1.large @ $0.240/hr. = $6.96
59 m1.small @ $0.06/hr. = $3.54
3. Turn off un-used instances
• Dev./test instances • Simple instance start/stop • Tear down/build up altogether • Instances are disposable
0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
On Demand Light Utilization RI Medium Utilization RI Heavy utilization RI
4. Use Reserved Instances Reserved Instances enable you to maximize savings by paying a low, one-time fee for a capacity reservation of 1-3 years in exchange for a significant discount on the hourly rate.
Amazon EC2 up to 65% savings Amazon RDS up to 76% savings Amazon DynamoDB up to 76% savings Amazon Redshift up to 73% savings Amazon ElastiCache up to 70% savings
AWS services offering reservations
5. Use Spot Instances
• Pricing • Up to 92% discount
• Elastic • Capacity not otherwise
available
• Tradeoff • Potential for interruption
Picking the right Bid Price - Tolerance for interruptions, % likelihood of termination
1.21 PFLOPS
264 years of compute in < 18 hours 16,788 instances in 8 regions
Customer Spotlight: Cycle Computing
On-Premises Spot
$68 Million
$33K
Case Study
Building a Top500 HPC Cluster on AWS
6. Leverage 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% • Up to 20% savings • Great for everything that is easy to
reproduce
Amazon Glacier • Same durability as S3 • 3 to 5 hours restore time • Up to 67% savings • Great for archiving, long-term backups
and old data
7. Offload your architecture The more you can offload, the less infrastructure you need to maintain, scale, and pay for • Offload popular traffic to Amazon CloudFront and S3 • Introduce Caching
Res
pons
e Ti
me
Ser
ver L
oad
Res
pons
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Ser
ver
Load
Res
pons
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Ser
ver
Load
No CDN CDN for Static
Content
CDN for Static & Dynamic Content 90% of calls
8. Use Application Services
Elastic Load
Balancing
Amazon Relational Database
Service (RDS)
Amazon Simple Queue Service
(SQS)
Amazon Simple Email Service
(SES)
Amazon Elastic
MapReduce
Amazon ElastiCache
Amazon Simple Notification
Service (SNS)
Web Servers Availability Zone
$0.025 per Elastic Load Balancer-hour (or partial hour) $0.008 per GB of data processed by an Elastic Load Balancer 100 GB Data processed, 1 ELB $18 (.025*24*30) + $.008*100 $18.80
Web Servers Availability Zone
EC2 instance + software LB
Elastic Load Balancer
DNS
DNS
VS
Leverage Application Services
$0.060 per hour, m1.small Separate for Software Load Balancer $.060*24*30 = $43.2 (m1.small) + Software LB Cost
On Demand Prices shown (N.Virginia region)
9. Use Consolidated Billing
• Receive a single bill for all charges incurred across all linked accounts • Share RI discounts • Combine tiering benefits
• View & manage linked accounts • Add additional accounts
10. Leverage AWS tools
AWS Trusted Advisor AWS EC2 Usage Reports
Cost Optimisation Techniques Recap Choose the right Instance type Use Auto Scaling Turn off un-used Instances Use Reserved Instances Use Spot Instances Leverage Storage Classes Offload your architecture Use Application Services Use Consolidated Billing Leverage AWS Tools – Trusted Advisor, EC2 Usage Reports Others…
Resources
AWS Economics Center: aws.amazon.com/economics TCO Calculator: aws.amazon.com/tco-calculator Flipboard Grows its Reader Base while Reducing IT Expenditure
http://youtu.be/_Ly3uPKLxS8 News Corp Discusses Plans for Migrating Data Centers to AWS:
http://youtu.be/xS8Ha0Q6_CY
Summary TCO
• Make reasonable assumptions and leverage industry benchmarks • Know the on-premises hidden costs • Use our new TCO Calculator
Cost Optimisation
• Create cost-aware architectures and leverage best practices • Re-evaluate and revisit your architecture often • Leverage Application Services, CloudWatch • Stay up to date – RI modifications, Trusted Advisor
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Ian Massingham – Technical Evangelist @IanMmmm
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