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AWS Summit Sydney 2014 | Moving to the Cloud. What does it Mean to your Business
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AWS Summit Sydney 2014 | Moving to the Cloud. What does it Mean to your Business

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You have attended AWS training. Gathered all the relevant information about AWS services but how do you now show the value of the AWS Cloud to your business. This session will run through how you......

You have attended AWS training. Gathered all the relevant information about AWS services but how do you now show the value of the AWS Cloud to your business. This session will run through how you would build a business case for the cloud including TCO and cost comparisons.

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  • 1. © 2014 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. Moving to the cloud. What does it mean for your business? Karl Durrance Amazon Web Services
  • 2. Agenda What are the business benefits for AWS? What would it cost to run on AWS? Business Case Total Cost of Ownership & Cost Optimisation
  • 3. Agenda What are the business benefits for AWS? What would it cost to run on AWS? Business Case Total Cost of Ownership & Cost Optimisation
  • 4. Business Benefits of Cloud No Upfront Expense Lower TCO Don’t Guess Capacity Increase Speed & Agility Focus on Core Business Go Global in Minutes
  • 5. Benefits delivered by AWS Replace CapEx with OpEx Lower Overall Costs No More Guessing Capacity Agility / Speed / Innovation ✔ ✔ ✔ ✔ ✔ Shift Focus to Differentiation Go Global in Minutes ✔
  • 6. The Benefits Are Only Possible IN THE CLOUD “Private” Cloud x x x xx x Replace CapEx with OpEx Lower Overall Costs No More Guessing Capacity Agility / Speed / Innovation ✔ ✔ ✔ ✔ ✔ Shift Focus to Differentiation Go Global in Minutes ✔
  • 7. Agenda What are the business benefits for AWS? What would it cost to run on AWS? Business Case Total Cost of Ownership & Cost Optimisation
  • 8. Lower Costs with AWS 1 “Average of 400 servers replaced per customer” Replace up-front capital expense with low variable cost 2 42 Price Reductions Economies of scale allow AWS to continually lower costs 3 Pricing model choice to support variable & stable workloads 4 Save more money as you grow bigger On-Demand Reserved Spot Tiered Pricing Volume Discounts Custom Pricing Dedicated Source: IDC Whitepaper, sponsored by Amazon, “The Business Value of Amazon Web Services Accelerates Over Time.” December 2013
  • 9. AWS Pricing Philosophy More AWS Usage More Infrastructure Economies of Scale Lower Infrastructure Costs Reduced Prices More Customers Ecosystem Global Footprint New Features New Services Infrastructure Innovation We pass the savings along to our customers in the form of low prices and continuous reductions 42PRICEREDUCTIONS
  • 10. Lower Costs than on-premises On-Premises Traditional Data Center On-Premises Virtualized Data Center CAPEX OPEX OPEX AWS CAPEX OPEX* Cost savings from running internal IT more efficiently AWS Scale •  New data centers built each year •  Volume purchasing, highly automated, supply chain optimization Utilization fundamentally higher in AWS cloud •  Aggregating non-correlated workloads, scale, spot market Amazon specific hardware designs •  OEM acquisition of custom servers & net gear •  Direct purchasing of disk, memory, & CPU •  AWS controlled hypervisor & net protocol layers Diagram is not to scale *For AWS, OPEX costs includes Reserved Instances one-time low, upfront payment, if Reserved Instances are used. Cost savings from moving to a public cloud provider
  • 11. AWS TCO benefits increase over time… $3.50 in benefits $1 Investment in AWS $1 Investment in AWS $8.40 in benefits At 36 Months of using AWS… At 60 Months of using AWS… ~3X ~8X Source: IDC Business Value of AWS Accelerates over time According to IDC, this relationship between length of time using AWS and return is due to customers leveraging the more optimized environment to generate more applications along a learning curve.
  • 12. Comparing TCO is not easy ≠
  • 13. Typical cost drivers for on-premises deployments, including overhead costs Network Costs Storage Costs Server Costs Hardware – Server, Rack Chassis PDUs, ToR Switches (+Maintenance) Software - OS, Virtualization Licenses (+Maintenance) Facilities Cost Space Power Cooling Hardware – Storage Disks, SAN/FC Switches Facilities Cost Storage Admin costs Network Hardware – LAN Switches, Load Balancer Bandwidth costs Network Admin costs Facilities Cost IT Labor Costs Server Admin Virtualization Admin 1 2 3 4 Space Power Cooling Space Power Cooling illustrative Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software costs. Facilities cost can include costs associated with upgrades, maintenance, building security, taxes etc. IT labor costs can include security admin and application admin costs. Often missing in customer estimates
  • 14. AWS offers services that include overhead costs in the price Hardware Vendor Offering ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Server Network Hardware Software OS + VMs DC/Co-lo Floor Space Powering Cooling Software Defined Networking Personnel Admins HW Maint. Storage Redundancy Resource Mgmt. /SW Automation × × × × ××× ×
  • 15. TCO Example : 100 VMs in Co-lo vs. AWS # of VMs Avg. vCPU Avg. vRAM Optimize by? Usage 25 1 2 RAM 5% 35 4 14 RAM 80% 30 8 32 RAM 60% 5 8 68 RAM 40% 5 16 128 Storage IO 8% # of Instances Instance vCPU RAM Instance Type 25 m1.small 1 1.7 On Demand 35 m3.xlarge 4 15 3 Yr. Heavy RI 30 m3.2xlarge 8 30 3 Yr. Med. RI 5 m2.4xlarge 8 68.4 3 Yr. Med. RI 5 i2.4xlarge 16 122 3 Yr. Light RI Avg. vCPU Avg. vRAM Optimize by? 1 2 CPU 4 14 CPU 8 32 CPU 8 68 CPU 16 128 Storage IO Instance vCPU RAM m1.small 1 1.7 c3.xlarge 4 7 c3.2xlarge 8 15 c3.2xlarge 8 15 i2.4xlarge 16 122
  • 16. TCO Example : 100 VMs in Co-lo vs. AWS aws.amazon.com/tco-calculator/‎
  • 17. In Your TCO Analysis Power/Cooling (compute, storage, shared network) Data Center Administration (procurement, design, build, operate, network, security personnel) Rent/Real Estate (building deprecation, taxes) Software (OS, Virtualization Licensing & Maintenance) RAW vs. USABLE storage capacity Storage Redundancy (RAID penalty, OS penalty) Storage Backup costs (Tape, backup software) Bandwidth, Network Gear & Redundancy (Routers, VPN, WAN..) DON’T FORGET THINK BENEFITS Procurement Time, Resource sitting on self Cost of lost customers Less down time, increased productivity
  • 18. Agenda What are the business benefits for AWS? What would it cost to run on AWS? Business Case Total Cost of Ownership & Cost Optimisation
  • 19. 1. Choose the right Instance types Start Choose an instance that best meets your basic requirements Start with memory & then choose closest virtual cores Look for peak IOPS storage requirements Tune Change instance size up or down based upon monitoring Use CloudWatch & Trusted Advisor to assess Roll-Out Run multiple instances in multiple Availability Zones
  • 20. Automatic resizing of compute clusters based on demand Trigger autoscaling policy Feature   Details   Control   Define  minimum  and  maximum  instance  pool   sizes  and  when  scaling  and  cool  down  occurs.   Integrated  to  Amazon   CloudWatch   Use  metrics  gathered  by  CloudWatch  to  drive   scaling.   Instance  types   Run  Auto  Scaling  for  On-­‐Demand  and  Spot   Instances.  CompaEble  with  VPC.   AWS autoscaling create-autoscaling-group — Auto Scaling-group-name MyGroup — Launch-configuration-name MyConfig — Min size 4 — Max size 200 — Availability Zones us-west-2c 2. Use Auto Scaling Amazon CloudWatch
  • 21. Utilization and Auto-Scaling: Granularity more small instances vs. less large instances 29 Large @ $0.233/hr = $6.76/hr 59 Small @ $0.058/hr = $3.42/hr On Demand Prices shown (Sydney region) – M1 instance family
  • 22. 3. Turn Off un-used Instances •  Dev./test/training instances •  Use simple instance start/stop, or •  Tear down/build up altogether •  Instances are disposable
  • 23. 0 2 4 6 8 10 12 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 On Demand Light Utilization RI Medium Utilization RI Heavy utilization RI /Spot Instances 4. Use Reserved Instances Reserved Instances enable you to reserve capacity for one or three years by paying a low, one-time fee for the capacity reservation and receiving a significant discount on the hourly charge for your instances Amazon EC2 Amazon RDS Amazon DynamoDB Amazon Redshift Amazon ElastiCache AWS Services offering Reservations
  • 24. 5. Use Spot Instances •  Pricing •  Up to 92% discount •  Elastic •  Capacity not otherwise available •  Minimum Commitment •  Commit to 1 hour •  Tradeoff •  Potential for interruption Picking the right Spot Bid Price - Tolerance for interruptions, % likelihood of termination
  • 25. 6. Leverage Storage Classes AWS Cloud Amazon Glacier Gateway Appliance/ AWS Storage Gateway Amazon S3 Block File On-premises Data Center Archive Backup Disaster Recovery Amazon EBS •  Amazon S3 Reduced Redundancy •  99.99% durability vs. 99.999999999% •  Up to 20% savings •  Great for everything that is easy to reproduce •  Amazon Glacier •  Same durability as S3 •  3 to 5 hours restore time •  Up to 89% savings •  Great for archiving, long-term backups and old data
  • 26. 7. Offload your Architecture + Standard Setup •  4 x Medium Instances $485 •  AWS Data Transfer 1 TB $194 •  Total = $679 Optimized •  1 x Medium Instance $121 •  CloudFront Data 1 TB $168 •  CloudFront Requests $1.89 •  Total = $291 57% 6X Cheaper Faster
  • 27. 8. Leverage Application Services Elastic Load Balancing Amazon Relational Database Service (RDS) Amazon Simple Queue Service (SQS) Amazon Simple Email Service (SES) Amazon Elastic MapReduce Amazon ElastiCache Amazon Simple Notification Service (SNS)
  • 28. 9. Consolidated Billing •  Receive a single bill for all charges incurred across all linked accounts •  Share RI discounts •  Combine tiering benefits •  View & manage linked accounts •  Add additional accounts
  • 29. 10. Leverage AWS Tools AWS Trusted Advisor AWS EC2 Usage Reports
  • 30. The Business Benefits alone are compelling –  No upfront Capex –  Lower TCO –  No Guessing Capacity –  Improved Agility & Speed –  Focus on Core Business –  Go Global in Minutes TCO –  When comparing make sure you capture all costs (Power, cooling, facilities) –  Leverage all purchasing options available (On-Demand, Reserved, Spot) –  Turn off instances and use Auto Scaling to further optimize –  Application services (RDS, SQS, ELB etc.) reduce cost even further Summary