Calculating AWS Total Cost of      (Non) Ownership       Sessions 1 and 2             Ben Butler       butlerb@amazon.com ...
Pay as you go
The AWS Cloud For Enterprises                                Tools to access                                services      ...
When Comparing TCO…
When calculating TCO…   #1 Start with a use case or an application – Buying racks vs.   deploying an application - and kno...
Start with Use case or pick the low-hanging fruit                                                              List your I...
Start with Use case or pick the low-hanging fruit                        Dash                        board       Web      ...
Stack Rank your IT Assets                   Search for under-utilized                   IT assets                   Applic...
Web Application Usage Patterns     Steady State           Spiky Predictable     Uncertain unpredictable     Usage Pattern ...
When calculating TCO…   #1 Start with a use case or an application - Migrating racks vs.   migrating application - and kno...
Take all the Fixed Costs in to considerationFixed Cost Factors                One-time Upfront            Monthly         ...
Hardware Administration Costs Database administration costs
When calculating TCO…   #1 Start with a use case or an application - Migrating racks vs.   migrating application - and kno...
Massive economies of scale andefficiency improvements allow us to             continually lower prices
AutomationDeployment
20 price cuts in last 6 years“NASA shifted to a new web services model that usesAmazon Web Services for cloud-based enterp...
Did you know?AWS Free Usage Tier      Free Services               Data Transfer  New Customers     Amazon EC2  (Linux & Wi...
When calculating TCO…    #1 Start with a use case or an application - Migrating racks vs.    migrating application - and k...
Multiple pricing models allow you to                      optimize costs for both variable and                      stable...
Save more when you reserve  On-demand                  Reserved                     Spot   Instances                 Insta...
Pay less when you use more
$14,000                      m2.xlarge running Linux in US-East Region                      over 3 Year period          $1...
www.agency.gov                                    (dynamic data)     Example: TCO of a                          Amazon Rou...
Steady State Usage Pattern                                        8Traffic Measured in Servers/Instances                  ...
TCO of Steady State Web Application            Scenario: Federal Agency organization website  TCO                         ...
When calculating TCO…    #1 Start with a use case or an application - Migrating racks vs.    migrating application - and k...
AWS delivers a premium security spec at   non-premium pricesCertifications        Physical Security         HW, SW, Networ...
Reduced Time to Market =          More Revenue                       Reduced Time to Decisions =                   More Mi...
Elasticity + Auto ScalingInfrastructureCost $             Large                                          You just lost    ...
AWS Pricing ResourcesTry our Simple Monthly Calculator• Estimate the cost of your deployment as a monthly cost• aws.amazon...
Thank you!      Ben Butlerbutlerb@amazon.com
Calculating AWS Total Cost of      (Non) Ownership          Session 2             Ben Butler       butlerb@amazon.com     ...
« Want to increase innovation?  Lower the cost of failure »                             Joi Ito
Experiment Often & Fail Quickly                                                             Cost of failure falls...
When Comparing TCO…
When calculating TCO…    #1 Start with a use case or an application - Migrating racks vs.    migrating application - and k...
Web Application Usage Patterns     Steady State           Spiky Predictable     Uncertain unpredictable     Usage Pattern ...
Save more when you reserve  On-demand                  Reserved                     Spot   Instances                 Insta...
Spiky Predictable Usage Pattern                                        12Traffic measured in Servers/Instances            ...
TCO of Spiky Predictable Web Application            Scenario: A space program has a launch event    TCO                   ...
Uncertain Unpredictable Usage Pattern                                        20Traffic measured in Servers/Instances      ...
Uncertain Usage Pattern                                        20                                        18Traffic measure...
TCO of Web Application with           uncertain unpredictable usage pattern   Scenario: A state agency disaster claim webs...
Cost of lost business or disappointed customers                                                           Uncertain Usage ...
When you turn off your cloud resources,     you actually stop paying for them
Light and Medium Utilization          Reserved Instances   Low upfront one-time fees   When you turn off, you save on hour...
When calculating TCO…    #1 Start with a use case or an application - Migrating racks vs.    migrating application - and k...
AWS delivers a premium security spec at   non-premium pricesCertifications        Physical Security         HW, SW, Networ...
Opportunity Cost
On a global footprint                                                Region US-WEST (N. California)                       ...
On a global footprint                        Availability Zone
Continuous optimization in your            architecture results in                recurring savingsas early as your next m...
How customers are       saving money with AWSAWS Economics CenterTCO WhitepapersCalculator ToolsCase StudiesOther Resources
AWS Pricing PhilosophyPay as you go• No minimum commitments or long-term contracts required• Capex -> Opex• Turn off when ...
Recap on when calculating TCO…    #1 Start with a use case or an application - Migrating racks vs.    migrating applicatio...
AWS Pricing ResourcesTry our Simple Monthly Calculator• Estimate the cost of your deployment as a monthly cost• aws.amazon...
Thank you!      Ben Butlerbutlerb@amazon.com
AWS TCO Compute
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AWS TCO Compute

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Transcript of "AWS TCO Compute "

  1. 1. Calculating AWS Total Cost of (Non) Ownership Sessions 1 and 2 Ben Butler butlerb@amazon.com Federal Solutions Architect
  2. 2. Pay as you go
  3. 3. The AWS Cloud For Enterprises Tools to access services Cross Service features High-level building blocks Low-level building blocks
  4. 4. When Comparing TCO…
  5. 5. When calculating TCO… #1 Start with a use case or an application – Buying racks vs. deploying an application - and know its current utilization
  6. 6. Start with Use case or pick the low-hanging fruit List your IT assets Dash board Identify upward and downward dependencies Web CRM Auth Start classifying your IT assets into different categories: • Applications with high, medium, LDAP Service low Information Assurance DB requirements Search • Applications that are internal-only, OLAP Engine partner/supply chain or customer- facing • Applications with high, medium and low coupling ERP Report logs • Applications with strict or relaxed licensing
  7. 7. Start with Use case or pick the low-hanging fruit Dash board Web CRM CRM Auth LDAP Service DB Search Search OLAP Engine ERP Report logs
  8. 8. Stack Rank your IT Assets Search for under-utilized IT assets Applications that has immediate business need to scale Applications that are running out of capacity Easiest to move today That Builds support within your organization and creates awareness and excitement
  9. 9. Web Application Usage Patterns Steady State Spiky Predictable Uncertain unpredictable Usage Pattern Usage Pattern Usage Pattern Scenario: Scenario: Scenario:A Federal Agency Website A space program A State Agency disaster launch event website Claim processing website
  10. 10. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs)
  11. 11. Take all the Fixed Costs in to considerationFixed Cost Factors One-time Upfront Monthly AWS Co-lo On-Site AWS Co-lo On-SiteServer Hardware 0 $$$ $$ $$ 0 0Network Hardware 0 $$ $$ 0 0 0Hardware Maintenance 0 $$ $$ 0 0 0Software OS 0 $$ $$ $ 0 0Power and Cooling and Data 0 0 $$ 0 0 $Center EfficiencyData Center/co-lo Space 0 $$ $$ 0 0 0Personnel (Administration) 0 $$ $$ $ $$ $$$Storage and Redundancy 0 $$ $$ $ 0 0Bandwidth $ $$ $ $$ $ $Resource Management 0 0 0 $$ $ 0SoftwareTotal
  12. 12. Hardware Administration Costs Database administration costs
  13. 13. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts
  14. 14. Massive economies of scale andefficiency improvements allow us to continually lower prices
  15. 15. AutomationDeployment
  16. 16. 20 price cuts in last 6 years“NASA shifted to a new web services model that usesAmazon Web Services for cloud-based enterpriseinfrastructure. This cloud-based model supports a widevariety of web applications and sites using aninteroperable, standards-based, and secure environmentwhile providing almost a million dollars in cost savingseach year.” Linda Cureton, NASA CIO http://wiki.nasa.gov/cm/blog/NASA-CIO-Blog/posts/post_1339205656611.html Massive economies of scale and efficiency improvements allow us to continually lower prices.
  17. 17. Did you know?AWS Free Usage Tier Free Services Data Transfer New Customers Amazon EC2 (Linux & Windows) Amazon ELB AWS Elastic Beanstalk No Charge for Inbound Amazon S3 AWS CloudFormation Data Transfer Amazon EBS AWS IAM Auto Scaling No Charge for Data For all customers Consolidated Billing Transfer Between Services within a region Amazon SQS/SNS Amazon DynamoDB Amazon SES Amazon SWF And more… aws.amazon.com/free
  18. 18. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Leverage Reserved Pricing instead of On-Demand Pricing (Amortize Monthly over 3-5 years)
  19. 19. Multiple pricing models allow you to optimize costs for both variable and stable workloadsOn-Demand, Reserved (Light, Medium and Heavy for 1-Year, 3-Year) and Spot
  20. 20. Save more when you reserve On-demand Reserved Spot Instances Instances Instances• Pay as you go • One time low • Requested Bid upfront fee + Price and Pay Pay as you go as you go• Starts from • $23 for 1 year • $0.005/Hour $0.02/Hour term and as of today at $0.01/Hour 9 AM 1-year and 3- year terms Heavy Medium Light Utilization Utilization RI Utilization RI RI
  21. 21. Pay less when you use more
  22. 22. $14,000 m2.xlarge running Linux in US-East Region over 3 Year period $12,000 $10,000 $8,000 Cost Heavy Utilization $6,000 Medium Utilization Light Utilization $4,000 On-Demand $2,000 $- UtilizationUtilization Sweet Spot Feature Savings over On-Demand<10% On-Demand No Upfront Commitment10% - 40% Light Utilization RI Ideal for Disaster Recovery Up to 56% (3-Year)40% - 75% Medium Utilization RI Standard Reserved Capacity Up to 66% (3-Year)>75% Heavy Utilization RI Lowest Total Cost Up to 71% (3-Year) Ideal for Baseline Servers
  23. 23. www.agency.gov (dynamic data) Example: TCO of a Amazon Route 53 media.agency.gov (DNS)3-tier Web Application Elastic Load (static data) Balancer Amazon Auto Scaling group : Web Tier CloudFront Amazon EC2 Auto Scaling group : App Tier Amazon RDS Amazon Amazon S3 Availability Zone #1 RDS Availability Zone #2
  24. 24. Steady State Usage Pattern 8Traffic Measured in Servers/Instances 6 4 Traffic pattern EC2 Reserved Physical servers 2 (on-premises) 0 0 5 10 15 20 25 30 35 Months
  25. 25. TCO of Steady State Web Application Scenario: Federal Agency organization website TCO Web Application - Steady State Usage Pattern On-Premises AWS Option 1 AWS Option 2 AWS Option 3 Option All Reserved Mix of On-Demand All On-Demand Amortized monthly costs over 3 years (3-Year Heavy) and ReservedOption 1: All ReservedRecommended Option (Most Cost- Compute/Server Costseffective)Server Hardware $306 $0 $0 $0 Network Hardware $62 $0 $0 $0Option 2:Hardware Maintenance Mix of On-Demand and Reserved $47 $0 $0 $0 Power and Cooling $172 $0 $0 $0 Data Center Space $144 $0 $0 $0Option 3:Personnel All On-Demand $1,200 $0 $0 $0Commitment-free and Risk-free Option AWS Instances $0 $618 $1,079 $2,138 Total - Per Month $1,932 $618.33 $1,079 $2,138 Total - 3 Years $69,552 $22,260.00 $38,859 $76,982 Savings over On-Premises Option 68.00% 44% -11%
  26. 26. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Leverage Reserved Pricing instead of On-Demand Pricing (Amortize Monthly over 3-5 years) #5 Intangible Cost Savings – Take a closer look at what you get as part of AWS
  27. 27. AWS delivers a premium security spec at non-premium pricesCertifications Physical Security HW, SW, Network SOC 1 Type 2 Datacenters in Systematic change (formerly SAS-70) nondescript facilities management ISO 27001 Physical access Phased updates strictly controlled deployment PCI DSS for EC2, S3, EBS, VPC, RDS, Must pass two-factor Safe storage ELB, IAM authentication at decommission least twice for floor FISMA Moderate Automated access Compliant Controls monitoring and self- Physical access audit HIPAA & ITAR logged and audited Compliant Advanced network Architecture protection
  28. 28. Reduced Time to Market = More Revenue Reduced Time to Decisions = More Mission/Science/Outcomes
  29. 29. Elasticity + Auto ScalingInfrastructureCost $ Large You just lost Capital customers Expenditure Predicted Demand Opportunity Traditional Cost Hardware Waste Actual Demand Cloud Automated Elasticity time
  30. 30. AWS Pricing ResourcesTry our Simple Monthly Calculator• Estimate the cost of your deployment as a monthly cost• aws.amazon.com/calculatorVisit our Economics Center• Seven reasons customer are saving money on AWS today• aws.amazon.com/economicsLearn more about Reserved Instances• Reserved pricing – aws.amazon.com/ec2/reserved-instancesTCO Whitepaper:• http://media.amazonwebservices.com/AWS_TCO_Web_Applications_ Public_Sector.pdfContact your Sales Rep for Custom Pricing or add’l questions• High volume projects with unique requirements
  31. 31. Thank you! Ben Butlerbutlerb@amazon.com
  32. 32. Calculating AWS Total Cost of (Non) Ownership Session 2 Ben Butler butlerb@amazon.com Federal Solutions Architect
  33. 33. « Want to increase innovation? Lower the cost of failure » Joi Ito
  34. 34. Experiment Often & Fail Quickly       Cost of failure falls dramatically People are free to try out new ideas  More risk taking, more innovation 
  35. 35. When Comparing TCO…
  36. 36. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Leverage Reserved Pricing instead of On-Demand Pricing (Amortize Monthly over 3-5 years) #5 Intangible Cost Savings – Take a closer look at what you get as part of AWS
  37. 37. Web Application Usage Patterns Steady State Spiky Predictable Uncertain unpredictable Usage Pattern Usage Pattern Usage Pattern Scenario: Scenario: Scenario:A Federal Agency Website A space program A State Agency disaster launch event website Claim processing website
  38. 38. Save more when you reserve On-demand Reserved Spot Instances Instances Instances• Pay as you go • One time low • Requested Bid upfront fee + Price and Pay Pay as you go as you go• Starts from • $23 for 1 year • $0.005/Hour $0.02/Hour term and as of today at $0.01/Hour 9 AM 1-year and 3- year terms Heavy Medium Light Utilization Utilization RI Utilization RI RI
  39. 39. Spiky Predictable Usage Pattern 12Traffic measured in Servers/Instances 10 8 6 Traffic Pattern EC2 Reserved 4 EC2 On-Demand Physical servers (on-premises) 2 0 0 5 10 15 20 25 30 35 Months
  40. 40. TCO of Spiky Predictable Web Application Scenario: A space program has a launch event TCO Web Application - Spiky Usage Pattern On-Premises AWS Option 1 AWS Option 2 AWS Option 3 Amortized monthly costs over 3 years Option All Reserved Mix of On-Demand All On-Demand and Reserved Compute/Server CostsOption 1: All Reserved Server Hardware $511 $0 $0 $0 Network Hardware $103 $0 $0 $0Option 2: Mix of On-Demand and Reserved Hardware Maintenance $79 $0 $0 $0Recommended Option (Most Cost-effective) Power and Cooling $287 $0 $0 $0 Data Center Space $241 $0 $0 $0Option 3: All On-Demand Personnel $2,000 $0 $0 $0Commitment-free and Risk-free Option AWS Instances $0 $992 $791 $1850 Total - Per Month $3,220 $992 $791 $1850 Total - 3 Years $115,920 $35,718 $28,491 $66,614 Savings over On-premises Option 69% 75% 43%
  41. 41. Uncertain Unpredictable Usage Pattern 20Traffic measured in Servers/Instances 18 16 14 12 10 Actual Traffic 8 Expected Traffic EC2 Reserved 6 EC2 On-Demand Physical servers 4 (on-premises) 2 0 0 5 10 15 20 25 30 35 Months
  42. 42. Uncertain Usage Pattern 20 18Traffic measured in Servers/Instances 16 14 12 10 Traffic Pattern 8 EC2 Baseline Reserved 6 EC2 On-Demand Physical servers 4 (on-premises) 2 0 0 5 10 15 20 25 30 35 Months
  43. 43. TCO of Web Application with uncertain unpredictable usage pattern Scenario: A state agency disaster claim website Option 2: Option 3:Option 1: Amortized monthly costs over 3 years On-Premises Option 1: On-Demand All On- Option All Reserved + All Web - 7 Reserved 3-Yr Heavy Reserved Demand App Compute/Server Costs 3-Yr Heavy – 7 Reserved DB – 2 Reserved 3-Yr Heavy Server Hardware $817 $0 $0 $0 Network Hardware $165 $0 $0 $0Option 2: Hardware Maintenance $126 $0 $0 $0 Web – 7 Reserved 1-Yr Heavy, then on-demand Power and Cooling $459 $0 $0 $0 App – 7 Reserved or Co-located Space then on-demand Data Center 1-Yr Heavy, $385 $0 $0 $0 DB – 2 Reserved Administration on-demand Hardware 1-Yr, then $3,200 $0 $0 $0 Instances $ $1,553 $1,394 $1,051Option 3: - Per Month Total $5,152 $1,553 $1,394 $1,051Recommended Option (Most Cost-effective) Total - 3 Years $185,472 $55,904 $50,193 $37,843 Web – On-Demand Instances Savings over On-Premises 70% 73% 80% App – On-Demand Instances DB – On-Demand Instances
  44. 44. Cost of lost business or disappointed customers Uncertain Usage Pattern 20 18 Traffic measured in Servers/Instances 16 14 12 10 Traffic Pattern 8 EC2 Baseline Reserved 6 EC2 On-Demand Physical servers 4 (on-premises) 2 0 0 5 10 15 20 25 30 35 Months
  45. 45. When you turn off your cloud resources, you actually stop paying for them
  46. 46. Light and Medium Utilization Reserved Instances Low upfront one-time fees When you turn off, you save on hourly usage
  47. 47. When calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Leverage Reserved Pricing instead of On-Demand Pricing (Amortize Monthly over 3-5 years) #5 Intangible Cost Savings – Take a closer look at what you get as part of AWS
  48. 48. AWS delivers a premium security spec at non-premium pricesCertifications Physical Security HW, SW, Network SOC 1 Type 2 Datacenters in Systematic change (formerly SAS-70) nondescript facilities management ISO 27001 Physical access Phased updates strictly controlled deployment PCI DSS for EC2, S3, EBS, VPC, RDS, Must pass two-factor Safe storage ELB, IAM authentication at decommission least twice for floor FISMA Moderate Automated access Compliant Controls monitoring and self- Physical access audit HIPAA & ITAR logged and audited Compliant Advanced network Architecture protection
  49. 49. Opportunity Cost
  50. 50. On a global footprint Region US-WEST (N. California) EU-WEST (Ireland) GOV CLOUD ASIA PAC (Tokyo) US-EAST (Virginia)US-WEST (Oregon) ASIA PAC (Singapore) SOUTH AMERICA (Sao Paulo)
  51. 51. On a global footprint Availability Zone
  52. 52. Continuous optimization in your architecture results in recurring savingsas early as your next month’s bill
  53. 53. How customers are saving money with AWSAWS Economics CenterTCO WhitepapersCalculator ToolsCase StudiesOther Resources
  54. 54. AWS Pricing PhilosophyPay as you go• No minimum commitments or long-term contracts required• Capex -> Opex• Turn off when you don’t need itPay less per unit when you use more• Tiered Pricing and Volume DiscountsPay even less when you reserve• Reserved pricingPay even less as AWS grows• Efficiencies, optimizations and economies of scale result in passing the savings back to you in the form of lower pricingCustom Pricing
  55. 55. Recap on when calculating TCO… #1 Start with a use case or an application - Migrating racks vs. migrating application - and know its current utilization #2 Take all the fixed costs into consideration (Don’t forget administration and redundancy costs) #3 Use Updated Pricing (compute, storage and bandwidth) Price cuts, Tiered Pricing and Volume Discounts #4 Leverage Reserved Pricing instead of On-Demand Pricing (Amortize Monthly over 3-5 years) #5 Intangible Costs – Take a closer look at what you get as part of AWS
  56. 56. AWS Pricing ResourcesTry our Simple Monthly Calculator• Estimate the cost of your deployment as a monthly cost• aws.amazon.com/calculatorLearn more about Reserved Instances• Reserved pricing – aws.amazon.com/ec2/reserved-instancesTry our Total Cost of Ownership CalculatorTCO Whitepaper:• http://media.amazonwebservices.com/AWS_TCO_Web_Applications_ Public_Sector.pdfContact your Sales Rep for Custom Pricing or add’l questions• High volume projects with unique requirements
  57. 57. Thank you! Ben Butlerbutlerb@amazon.com

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