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Bootstrapping - Session 3 - Costs & Agility: Achieving the IT “X Factor
 

Bootstrapping - Session 3 - Costs & Agility: Achieving the IT “X Factor

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This presentation explores 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 ...

This presentation explores 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. We’ll be joined by Mark Miller. the CEO of Tellybug, who deliver real time voting, play along and social engagement for “The XFactor”, “The Voice” and “Britain’s Got Talent”. For a couple of hours a week Tellybug is driving enough traffic to be the equivalent of the second most visited website on the internet. We’ll learn how they cope with such huge infrastructure challenges and how they manage costs.

Dan Rogers, Product & Digital Marketing, AWS
Matt Millar, CEO, Tellybug

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    Bootstrapping - Session 3 - Costs & Agility: Achieving the IT “X Factor Bootstrapping - Session 3 - Costs & Agility: Achieving the IT “X Factor Presentation Transcript

    • Dan Roger, AWS Product MarketingAgility & Cost SavingsAchieving the ‘X-Factor’
    • AWS Customers Are Realizing Long Term BenefitsSaved $34M onSmartHub app10’s of millions of $saved with first 12apps migrated to AWS50%+reduction inserver costsdecreased IToperating costsby 75%
    • In early 2012, AWS commissioned IDC to interview 11 organizations that deployed applications on AWS.“We estimate that forevery dollar spent onAWS, there is at least $3-4 NOT spent ontraditional I/T”Baird Equity ResearchAnalysts have proven out the results
    • Pay For Infrastructure as you Need it, Not Up FrontOn-Premises
    • DemandQ1 Q2 Q3 Q4 Q1wastedcapacitylost customers,ordered hardwarewastedcapacitywastedcapacitywastedcapacity200k300k600kTimeCapacity of resourcesActual demandTraditional IT = Waste or Missed Opportunity
    • DemandAWSWith AWS match resources to demandQ1 Q2 Q3 Q4 Q1200k300k600kDemandTime
    • AWS Gives you an Off Switch for IT
    • 024681012141 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24LoadHourly CPU Load25% SavingsDayOptimize by Time of Day
    • 1 5 9 13 17 21 25 29 33 37 41 45 49WebServersWeeks in a Year50% Savings Weekly CPU LoadOptimize by Annual Business Cycles
    • The cost of innovation is high with Traditional IT$250K budgetStart OverFund 1 Idea 6 MonthsFail
    • Experiment Often & Adapt Quickly with AWS• Cost of failure falls dramatically• Return on (small incremental)Investments is high• More risk taking, more innovation• More iteration, faster innovation
    • On-DemandPay for computecapacity by the hourwith no long-termcommitmentsFor spiky workloads,or to define needsReservedMake a low, one-timepayment and receivea significant discounton the hourly chargeFor committedutilizationSpotBid for unusedcapacity, charged at aSpot Price whichfluctuates based onsupply and demandFor time-insensitive ortransient workloadsFree TierGet Started on AWSwith free usage & nocommitmentFor POCs and gettingstartedAWS offers Many Pricing Options To Fit Workloads
    • Types of Reserved Instances
    • Reserve to save$-$500$1,000$1,500$2,000$2,500$3,000$3,500$4,0001 2 3 4 5 6 7 8 9 10 11 12On-DemandLightMediumHeavy1 Year Cost:High MemoryExtra LargeInstanceMonthsOn-Demand vs. 1 Year RIs1 MonthBreakeven2 MonthsBreakeven51%-61%savingsSave Even Morewith 3 Year RIsUpto 76%
    • Leverage a Portfolio of Reserved Instances
    • What are Spot Instances?• Value to the customer Pricing• Up to 92% discount off of On-Demand Instance Elastic• Potential to get capacity nototherwise available Minimum Commitment• Only need to commit to 1 hour• Tradeoff Potential for interruption
    • Our Scale and Low-Margin Approach is UniqueWe build IT at higher scalethan most any operator ofdata centers in the worldWe are comfortable running a highvolume, low margin businessWe pass the savings along toour customers in the form oflow prices and continuousreductions
    • Comparing IT costs on-premises vs. cloud isn’t easy
    • AWS Includes Everything in the PriceHardwareVendorOffering
    • Fixed Cost Factors One-time Upfront MonthlyAWS Co-lo On-Site AWS Co-lo On-SiteServer Hardware 0 $$$ $$ $$ 0 0Network Hardware 0 $$ $$ 0 0 0Hardware Maintenance 0 $$ $$ 0 0 0Software OS 0 $$ $$ $ 0 0Power and Cooling and Data CenterEfficiency0 0 $$ 0 0 $Data Center/co-lo Space 0 $$ $$ 0 0 0Personnel (Administration) 0 $$ $$ $ $$ $$$Storage and Redundancy 0 $$ $$ $ 0 0Bandwidth $ $$ $ $$ $ $Resource Management Software 0 0 0 $$ $ 0TotalTake all the fixed costs into consideration
    • Use our TCO Calculator to Compare Costs
    • Servers Think 3-5 year time frameUse Heavy Utilization Reserved Instancesfor apples to apples comparisonsHW maintenance starts at 10%Don’t forget your VM maintenance costsStorageNetworkEnvironmentAdministration
    • Utilization rarely exceeds 60%Three copies of your data in three datacenterswith Amazon S3Less expensive at every tierServersStorageNetworkEnvironmentAdministration
    • Buying fixed ISP bandwidth means wasteAdministration costs and hardware costs for yournetworkMore bandwidth gets less expensive in AWSRedundancy for free: AWS aggregates bandwidthfrom multiple Telco providersServersStorageNetworkEnvironmentAdministration
    • Rent, power, cooling, cabling – all that stuffWith colocation providers – you are buyingless than a full rackDatacenters were built for last decade’sequipment – prepare for upchargesServersStorageNetworkEnvironmentAdministration
    • Hardware requires specialty skillsets at premiumratesLack of automation options = focus on provisioningresources rather than innovating4X improvement in server to admin ratio going toAWSServersStorageNetworkEnvironmentAdministration
    • #1 Start with a use case or an application – compare apples to apples, capacityutilization, 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, flexibilityWhen calculating TCO…
    • Cost Optimization Tips
    • 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.
    • 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.
    • • Review the amount of memory and CPU• Select an instance that provides enoughbuffer 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.
    • 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.
    • 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.
    • Free Offering– Goals• Optimize for reducingcost• Acceptable Delay Limits– Implementation• Use Spot, if delay then useOn-Demand• Maximum Spot Bid Price isless than On-DemandpricePremium Offering© 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.
    • Proactive Cost Optimization with Trusted Advisor
    • Getting the X FactorMatt Millar CEO
    • 39
    • Online tap to clap in sync with showEmbeddable into broadcaster show website & twitterViral distribution via facebook and twitter
    • • 20 Million viewers• Design goal 1,000,000 active viewers– Over a 60 minute show. With acts on stage for 5minute segments.– Equivalent to 260bn requests/month• But just on Saturday and Sunday nights
    • Source: http://www.google.com/adplanner/static/top1000/#Where does260 Billionrequests fit?
    • • Large numbers of servers for short periods of time• Scale in seconds not hours• Flexibility in choice• Low cost
    • TV Traffic arrives fast
    • • 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 ownmonitoring solution)
    • 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
    • Thank you!