Agility and Cost Savings: Achieving the IT “X Factor
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Agility and Cost Savings: Achieving the IT “X Factor

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In this session we will explore how customers are saving money and enabling new kinds of work with AWS today. The topics we will cover in this session will include; how the cost model changes with ...

In this session we will explore how customers are saving money and enabling new kinds of work with AWS today. The topics we will cover in this session will include; how the cost model changes with cloud computing, how to do detailed IT cost comparisons (TCO) for on-premise versus AWS.

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Agility and Cost Savings: Achieving the IT “X Factor Presentation Transcript

  • 1. Agility & Cost Savings Achieving the ‘X-Factor’ Yuri Misnik Head of Solutions Architecture UK and IR ymisnik@amazon.co.uk
  • 2. AWS Customers Are Realizing Long Term Benefits Saved $34M on SmartHub app 10’s of millions of $ saved with first 12 apps migrated to AWS 50%+ reduction in server costs decreased IT operating costs by 75%
  • 3. Analysts have proven out the results “We estimate that for every dollar spent on AWS, there is at least $34 NOT spent on traditional I/T” Baird Equity Research In early 2012, AWS commissioned IDC to interview 11 organizations that deployed applications on AWS.
  • 4. Pay For Infrastructure as you Need it, Not Up Front On-Premises
  • 5. Traditional IT = Waste or Missed Opportunity wasted capacity Demand wasted capacity 600k wasted capacity 300k wasted capacity lost customers, ordered hardware 200k Capacity of resources Actual demand Q1 Q2 Q3 Time Q4 Q1
  • 6. With AWS match resources to demand Demand 600k 300k AWS Demand 200k Q1 Q2 Q3 Q4 Time Q1
  • 7. AWS Gives you an Off Switch for IT
  • 8. Optimize by Time of Day Load Hourly CPU Load 14 12 10 8 6 4 2 0 25% Savings 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Day
  • 9. Optimize by Annual Business Cycles Savings Weekly CPU Load Web Servers 50% 1 5 9 13 17 21 25 29 33 Weeks in a Year 37 41 45 49
  • 10. The cost of innovation is high with Traditional IT Fund 1 Idea 6 Months Fail $250K budget Start Over
  • 11. Experiment Often & Adapt Quickly with AWS • Cost of failure falls dramatically • Return on (small incremental) Investments is high • More risk taking, more innovation • More iteration, faster innovation
  • 12. AWS offers Many Pricing Options To Fit Workloads Free Tier Get Started on AWS with free usage & no commitment For POCs and getting started On-Demand Pay for compute capacity by the hour with no long-term commitments For spiky workloads, or to define needs Reserved Spot Make a low, one-time payment and receive a significant discount on the hourly charge Bid for unused capacity, charged at a Spot Price which fluctuates based on supply and demand For committed utilization For time-insensitive or transient workloads
  • 13. Types of Reserved Instances
  • 14. Reserve to save $4,000 On-Demand vs. 1 Year RIs $3,500 $3,000 1 Year Cost: High Memory Extra Large Instance 51%-61% savings $2,500 $2,000 On-Demand SaveLight More Even with 3 Year RIs UptoMedium 76% 2 Months Breakeven $1,500 Heavy $1,000 $500 1 Month Breakeven $1 2 3 4 5 6 Months 7 8 9 10 11 12
  • 15. Leverage a Portfolio of Reserved Instances
  • 16. What are Spot Instances? • Value to the customer  Pricing • Up to 92% discount off of OnDemand Instance  Elastic • Potential to get capacity not otherwise available  Minimum Commitment • Only need to commit to 1 hour • Tradeoff  Potential for interruption
  • 17. Our Scale and Low-Margin Approach is Unique We build IT at higher scale than most any operator of data centers in the world We are comfortable running a high volume, low margin business We pass the savings along to our customers in the form of low prices and continuous reductions
  • 18. Comparing IT costs on-premises vs. cloud isn’t easy
  • 19. AWS Includes Everything in the Price Hardware Vendor Offering
  • 20. Take all the fixed costs into consideration Fixed Cost Factors One-time Upfront AWS Co-lo Monthly On-Site AWS Co-lo On-Site Server Hardware 0 $$$ $$ $$ 0 0 Network Hardware 0 $$ $$ 0 0 0 Hardware Maintenance 0 $$ $$ 0 0 0 Software OS 0 $$ $$ $ 0 0 Power and Cooling and Data Center Efficiency 0 0 $$ 0 0 $ Data Center/co-lo Space 0 $$ $$ 0 0 0 Personnel (Administration) 0 $$ $$ $ $$ $$$ Storage and Redundancy 0 $$ $$ $ 0 0 Bandwidth $ $$ $ $$ $ $ Resource Management Software 0 0 0 $$ $ 0 Total
  • 21. Use our TCO Calculator to Compare Costs
  • 22. Cost estimation for Customer IT estate Current Estimated Cost Customer IT Estate AWS Equivalent Costs Cost Savings Estimated 3 year cost $97m AWS Enhanced Enterprise Support 4,311 “Stacks” + 1500 AWS On-Demand Instances 3PB Storage 4,311 Stack Equivalent + 1500 AWS Instances 3Yr RI AWS 3 year cost $54m
  • 23. Servers Storage Network Environment Think 3-5 year time frame Use Heavy Utilization Reserved Instances for apples to apples comparisons HW maintenance starts at 10% Administration Don’t forget your VM maintenance costs
  • 24. Servers Storage Network Utilization rarely exceeds 60% Three copies of your data in three datacenters with Amazon S3 Environment Administration Less expensive at every tier
  • 25. Servers Buying fixed ISP bandwidth means waste Storage Network Administration costs and hardware costs for your network Environment More bandwidth gets less expensive in AWS Administration Redundancy for free: AWS aggregates bandwidth from multiple Telco providers
  • 26. Servers Storage Network Environment Administration Rent, power, cooling, cabling – all that stuff With colocation providers – you are buying less than a full rack Datacenters were built for last decade’s equipment – prepare for upcharges
  • 27. Servers Storage Network Environment Administration Hardware requires specialty skillsets at premium rates Lack of automation options = focus on provisioning resources rather than innovating 4X improvement in server to admin ratio going to AWS
  • 28. When calculating TCO… #1 Start with a use case or an application – compare apples to apples, capacity utilization, networking, availability, peak to average, etc. #2 Take all the costs into consideration (Don’t forget administration, maintenance and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Use variable capacity & reserved instances where they fit the business needs #5 Intangible Costs – Take a closer look at what is built in with AWS – security, elasticity, innovation, flexibility
  • 29. Cost Optimization Tips
  • 30. Tip 1: Pay for what you use © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 31. Auto Scaling scales on demand or a schedule © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 32. • • • Review the amount of memory and CPU Select an instance that provides enough buffer to meet your requirements Only scale to a larger instance when needed © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 33. Tip 3: © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 34. Lever 3: © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 35. Free Offering Premium Offering – Goals • Optimize for reducing cost • Acceptable Delay Limits – Implementation • Use Spot, if delay then use On-Demand • Maximum Spot Bid Price is less than On-Demand price © 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.
  • 36. Proactive Cost Optimization with Trusted Advisor
  • 37. Getting the X Factor Matt Millar CEO
  • 38. 40
  • 39. Online tap to clap in sync with show Embeddable into broadcaster show website & twitter Viral distribution via facebook and twitter
  • 40. • 20 Million viewers • Design goal 1,000,000 active viewers – Over a 60 minute show. With acts on stage for 5 minute segments. – Equivalent to 260bn requests/month • But just on Saturday and Sunday nights
  • 41. Where does 260 Billion requests fit? Source: http://www.google.com/adplanner/static/top1000/#
  • 42. • • • • Large numbers of servers for short periods of time Scale in seconds not hours Flexibility in choice Low cost
  • 43. TV Traffic arrives fast
  • 44. • Amazon Elastic Compute Cloud (Amazon EC2) instances for proxy, cache, web, write DB • Amazon Relational Database Service (Amazon RDS) for our MySQL servers • Amazon CloudFront for CDN distribution • Amazon CloudWatch metrics (along with our own monitoring solution)
  • 45. Summary: Achieving the IT X Factor • Do a TCO comparison • Don’t pay us more than you need to (RI, Autoscale) • Optimize with Trusted Advisor
  • 46. Thank you!