the *new* science of choosing aws reserved instances
TRANSCRIPT
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The (new) Science Behind Choosing AWS RIs
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Introduction
Today’s Topics
๏ The new mechanics of RIs, including the new Upfront, Partial Upfront, and No Upfront types
๏ Finding the balance between savings and cashflow
๏ Reducing needless on-demand spending using Reserved Instances Toban Zolman
VP of Product Development
TODAY’S SPEAKER
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About Us
Cloud Infrastructure Analytics
Infrastructure analytics for scaled web businesses and enterprises.
$1.5B+ in tracked cloud costs. 14,000+ Users
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Our SolutionHow It Works
1 2 3
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Spend Management Spending visibility via monthly forecasts, dash-board, budget alerts, and daily email digests.
Cost Analytics Dig into your operating costs with detailed costs by tag, service, and usage type.
EC2 Usage Analytics Spot under-utilized resources w/ instance level usage metrics.
RI Purchase Analytics Understand the exact combination of Reserved Instances that will maximize your savings.
Enterprise Enablement Organizational group views/filtering/rollups, multi-user access.
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No Software to InstallHow It Works
We Collect We pull data directly from public cloud provider APIs.
We Store We warehouse your historical data.
You Access You log into cloudability.com to access analytics.
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NEW AND IMPROVED!RI Mechanics
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Cost Savings Capacity Reservation
Reservations have two parts
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Reservations are applied each hour
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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 Light
r3 8xlarge RHEL us-west-2b 3 years Medium
m3 medium Windows ap-northeast-1b 1 year Heavy
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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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Cash flow vs. Savings
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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%
Monthly fees are paid regardless of usage level
m3.medium:us-east:linux
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All RI types are a commitment to pay for full utilization (even if you don’t use it)
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lightmedium heavy
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No upfront / Partial upfront / All upfront
Remember: you’re paying for the hours even if you don’t use them
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RI Mechanics
Break Even Points
$0
$175
$350
$525
$700
0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
On Demand No upfront Partial upfront All upfront
Decision between Partial and All upfront based on cash flow preferences
$8.00 difference
m3.medium:us-east:linux
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RI Management Approach
Reservations Infrastructure
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Aligning RIs to infrastructure is more important than ever because RIs are all sunk cost
Buy
MeasureLearn
PurchaseAlign
ROI
minimize time through loop
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RI Management
Which type of RI should I select?
๏ Max out your budget on partial or all upfront RIsLeverage no upfront RIs to fill the balance of your needs
๏ Don’t wait to buy upfront fee RIs. Get coverage with no upfront RIs todayFor most RIs paying for two months of on-demand and then moving to all upfront is more expensive than buying a no upfront today
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Purchase RIs as frequently as possible
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RI Management
How to Structure Monthly Purchases1. Cover as many hours as you can as quickly as you can
The faster you can get coverage the more you will save over time
2. Focus your budget on high confidence purchases Buy reservations for instances that are (almost) always running
3. Focus on the highest savings firstBuy reservations for instances that have a rapid ROI
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Migrate and Modify
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1. Consolidate instance families
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RI Management
Why Instance Families Matter๏ RI modifications can only happen within a family
Reservations can be changed at any time from one size to another within a family
๏ RIs can apply across consolidated billing accountsReservations can apply across linked accounts if the original account is not using it. Fewer families means more spots an RI can be applied.
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2. Migrate to modern instances
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RI Management
Cost Savings from Migrating
m1.medium m3.medium
On Demand $0.087 $0.07
Heavy RI upfront $247 $222
Heavy RI hourly $0.02 $0.018
Annual Cost (100% util) $762 $613
Save $150 yr20% savings
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Modifications let you update reservations tomaximize savings as your infrastructure changes
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RI Management
Modifying Reserved InstancesInstances with Linux OS Instance type (within family)Availability Zone (within region)Network (VPC or Classic)
Instances with a licensed OS or without a family Availability Zone (within region)Network (VPC or Classic)
Reservations cannot be moved between accounts
