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AWS Cloud Kata | Bangkok - Getting to Profitability

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  • 1. Kuala Lumpur Getting to Profitability Robert Zepeda,MD, Playbasis AWS Cloud Kata for Start-Ups and Developers
  • 2. playbasis playbasis.com | @playbasis
  • 3. Engagement Management Platform playbasis
  • 4. Playbasis Engagement Stack User Management Analytics Notifications Rewards Catalog Gamification Engine SDKs playbasis
  • 5. Playbasis on AWS playbasis
  • 6. >700K registered users 1000s of transactions /day $800.00 $700.00 Less than $3,000 USD spent to date (roughly the cost of a Mac Book Pro) $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 playbasis
  • 7. Case Study: Burufly burufly.com playbasis
  • 8. Case Study: TMB Makethedifference.org playbasis
  • 9. Upcoming Deployments playbasis
  • 10. Getting to Profitability
  • 11. The Infamous Hockey Stick Usage Page Views Revenue Etc. Time
  • 12. The Infamous Hockey Stick Usage Page Views Revenue Etc. Costs Time
  • 13. You want only 3 things
  • 14. Revenue to go Up Unit Costs to go Down Margin to go Up
  • 15. The Infamous Hockey Stick Usage Page Views Revenue Etc. Costs Time
  • 16. How does AWS help here?
  • 17. Economies of Scale Pricing Models Cost Aware Architecting
  • 18. What does this look like in the real world?
  • 19. An example ! ! ! ! ! !             Enterprise  so+ware  provider  in  APAC   Focused  on  SaaS  for  storage,  security,  collabora=on,  etc.   Backed  by  leading  VC’s  in  the  region   Strong  growth  –  winning  customers  globally   Focused  on  profitability  &  reducing  unit  costs   Worked  closely  with  the  AWS  team  to  op=mize  its  architecture  
  • 20. “Based on a True Story” Margin Growth 54% reduction in unit costs -20% -10% price drop RI purchase in S3 -22% Migration Cassandra to Dynamo -18% Price drop in S3 of 25%
  • 21. Idea MVP Scale Profitability 01 02 03 04
  • 22. Scale Getting to Profitability Profitability 03 04 Pricing Models Cost Aware Architecting Total Cost of Ownership
  • 23. Cost Optimization using different purchase models Free Tier On-Demand Reserved Spot Get Started on AWS with free usage & no commitment Pay for compute capacity by the hour with no long-term commitments 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 POCs and getting started For spiky workloads, or to define needs For committed utilization For time-insensitive or transient workloads
  • 24. aws.amazon.com/activate/cloudkata
  • 25. Reserved Instance Pricing Make a low, one-time payment and receive a significant discount on the hourly charge For committed utilization 3 Versions • Light Utilization RI • Medium Utilization RI • High Utilization RI 2 Terms • 1-year • 3-year
  • 26. Reserved Instance Pricing U"liza"on   RI  op"on   Savings  over  On-­‐Demand   <10%   On-­‐Demand   10%  -­‐  40%   Light  U=liza=on  RI   Up  to  56%   40%  -­‐  75%   Medium  U=liza=on  RI   Up  to  66%   >75%   Heavy  U=liza=on  RI   Up  to  71%  
  • 27. •  Most traffic happens in the afternoons and evenings, so they reduce the number of instances at night by 40%. •  At peak traffic $52 an hour is spent on EC2 and at night, during off peak, the spend is as little as $15 an hour. Saving per hour = 71%
  • 28. Save more money by using Spot Instances Spot  market  for  under-­‐ u=lized  capacity     Requested  Bid  Price  and   Pay  as  you  go   Spot  Price  <  On-­‐Demand  Price       Up  to  85%  savings  over  On  Demand  pricing  
  • 29. Use Cases for Spot Pricing Use  Case   Batch  Processing   Types  of  Applica"ons   Generic  background  processing  (scale  out  compu=ng)   Hadoop   Hadoop/MapReduce  processing  type  jobs  (e.g.  Search,  Big  Data,  etc.)     Scien"fic  Compu"ng   Scien=fic  trials/simula=ons/analysis  in  chemistry,  physics,  and  biology   Video  and  Image  Processing/ Rendering   Tes"ng   Transform  videos  into  specific  formats   Web/Data  Crawling   Financial   HPC   Analyzing  data  and  processing  it   Hedgefund  analy=cs,  energy  trading,  etc   U=lize  HPC  servers  to  do    embarrassingly  parallel  jobs   Cheap  Compute   Backend  servers  for  Facebook  games   Provide  tes=ng  of  so+ware,  web  sites,  etc  
  • 30. Optimizing Video Transcoding Workloads for a FREEMIUM model Premium Offering Free Offering Optimize for reducing cost Acceptable Delay Limits Optimized for Faster response No Delays   Implementation –  –  –  –  Leverage spot pricing Maximum Bid Price < On-demand Rate Use on-demand Instances, if delay Get strongly reduced price for your workload Implementation –  Invest in Reserved Instances –  Use on-demand for Elasticity Get Instant Capacity for higher price
  • 31. Scale Getting to Profitability Profitability 03 04 Pricing Models Cost Aware Architecting Total Cost of Ownership
  • 32. “Give me 4 fault tolerant algorithms and I can pick the best one almost with my eyes closed. If you then ask me which one is best for the business, in terms of dollar costs, I would be clueless...” Werner Vogels, CTO, Amazon
  • 33. Cost optimization through ‘Cost Aware Architecting’ Reduce Cost of… Compute …by leveraging: 1. S3 & CloudFront for Caching & Offloading 2. Auto-Scaling done Right Storage 3. Storing derivative objects in S3 ‘Reduced Redundancy’ Database 4. Read Replicas and/or ElastiCache Test & Dev 5. Rapid proto-typing & Lean Dev/Test
  • 34. Cost Aware Architecting to Reduce costs of EC2 1. S3 & CloudFront for Caching & Offloading •  Reduce your compute demand and costs •  Improve end-user experience •  Increase reliability and durability
  • 35. Cost Aware Architecting to Reduce costs of EC2 1. S3 & CloudFront for Caching & Offloading
  • 36. Cost Aware Architecting to Reduce costs of EC2 1. S3 & CloudFront for Caching & Offloading The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again.
  • 37. Cost Aware Architecting to Reduce costs of EC2 1. S3 & CloudFront for Caching & Offloading
  • 38. Cost Aware Architecting to Reduce costs of EC2 1. S3 & CloudFront for Caching & Offloading
  • 39. Static content Dynamic calls
  • 40. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response •  Elastic Load Balancing and (event-driven) Auto Scaling •  Notification of pending news flash (with audible alarm) •  On-demand ramp up of capacity (6 mins.) •  Subscriber alert push delivered •  Mass response traffic handled (followed by ramp down)
  • 41. Buuuk for Singapore Press Holding (SPH)
  • 42. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response Buuuk Straits Times
  • 43. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response
  • 44. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response
  • 45. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response
  • 46. Cost Aware Architecting to Reduce costs of EC2 2. Auto-Scaling done Right with Real Time reaction response
  • 47. Cost Aware Architecting to Reduce costs of S3 3. Storing derivative objects in S3 ‘Reduced Redundancy’ •  Original vs. derived assets : 33% savings •  Single reference and consistency •  Control, accurate logs and tracking Reduced Redundancy Storage ‘RRS’
  • 48. Cost Aware Architecting to Reduce costs of DB 4. Read Replicas and/or ElastiCache (‘Database Smarts’) •  •  •  •  Scale out and share work Optimal performance, minimize load Enhance reliability, ensure data safety Cost reduction
  • 49. 90% of calls
  • 50. Cost Aware Architecting to Reduce costs of Test/Dev 5. Rapid proto-typing & Lean Dev/Test •  Inexpensive idea validation •  Seamless switch over and versioning •  Rapid dev / test agility
  • 51. Scale Getting to Profitability Profitability 03 04 Pricing Models Cost Aware Architecting Total Cost of Ownership
  • 52. When  calcula"ng  TCO…   #1  Start  by  understanding  your  use  cases  &  usage  paUerns  
  • 53. Tradi=onal  HW  /  Hos=ng   WASTE On and Off Fast Growth Variable peaks Predictable peaks CUSTOMER DISSATISFACTION
  • 54. AWS  =  Elas=c  Capacity   On and Off Fast Growth Variable peaks Predictable peaks
  • 55. When  calcula"ng  TCO…   #1  Start  by  understanding  your  use  cases  &  usage  paUerns   #2  Apples  to  Apples  –  Take  all  the  fixed  costs  into  considera"on  
  • 56. When  calcula"ng  TCO…   #1  Start  by  understanding  your  use  cases  &  usage  paUerns   #2  Apples  to  Apples  –  Take  all  the  fixed  costs  into  considera"on   #3  Leverage  ‘Cost  Aware  Architec"ng’  to  reduce  resources  
  • 57. Tradi"onal  Hos"ng  vs  AWS   # of (virtual) servers 60   50   40   30   20   10   0   Hos=ng   Hosting Offload to S3 Caching with CF AutoScaling Etc.
  • 58. When  calcula"ng  TCO…   #1  Start  by  understanding  your  use  cases  &  usage  paUerns   #2  Apples  to  Apples  –  Take  all  the  fixed  costs  into  considera"on   #3  Leverage  ‘Cost  Aware  Architec"ng’  to  reduce  resources   #4  Include  pricing  models  (RI,  Spot)  and  economies  of  scale  
  • 59. “Based on a True Story” Margin Growth 54% reduction in unit costs -20% -10% price drop RI purchase in S3 -22% Migration Cassandra to Dynamo -18% Price drop in S3 of 25%
  • 60. When  calcula"ng  TCO…   #1  Start  by  understanding  your  use  cases  &  usage  paUerns   #2  Apples  to  Apples  –  Take  all  the  fixed  costs  into  considera"on   #3  Leverage  ‘Cost  Aware  Architec"ng’  to  reduce  resources   #4  Include  pricing  models  (RI,  Spot)  and  economies  of  scale   #5  Take  a  look  at  what’s  included:  Intangible  Cost  Savings  !  
  • 61. Did you know? Free Usage Tier Free Services Data Transfer AWS Elastic Beanstalk AWS CloudFormation AWS IAM Auto Scaling Consolidated Billing No Charge for New Customers Amazon EC2 Amazon RDS Amazon ELB Amazon S3 Amazon EBS For All Customers Amazon SQS/SNS Amazon DynamoDB Amazon SES Amazon SWF And more… Inbound Data Transfer Data Transfer between Instances within an Availability Zone
  • 62. Trusted Advisor
  • 63. A premium security spec at non-premium prices •  VPC •  Direct connect and VPC •  Dedicated instances Network ACL •  Identity & Access •  Multi-Factor Authentication Management •  CloudHSM S3 Encryption •  RDS Oracle transparent •  •  Security groups for EC2 encryption
  • 64. DEMO   Gegng  to  Profitability   Off-loading of static content to CloudFront to reduce required server capacity
  • 65. So what does this mean in terms of costs? Standard Architecture Month Medium EC2 instances 4 $ 485 AWS Data Transfer Out 1Tb $ 194 TOTAL $ 679 Optimized Architecture Month Medium EC2 instances 1 $ 121 CloudFront Data Transfer Out 1Tb $ 168 CloudFront Requests $1.89 TOTAL $ 291 57% lower cost – 6 x faster
  • 66. Thank You aws.amazon.com/start-­‐ups   aws.amazon.com/ac"vate/cloudkata