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AWS Summit 2013 | Singapore - Understanding the Total Cost of (Non) Ownership in the AWS Cloud
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AWS Summit 2013 | Singapore - Understanding the Total Cost of (Non) Ownership in the AWS Cloud

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Explore the financial considerations of owning and operating a traditional data center versus utilizing cloud infrastructure. The session will consider many cost factors which can be overlooked when ...

Explore the financial considerations of owning and operating a traditional data center versus utilizing cloud infrastructure. The session will consider many cost factors which can be overlooked when comparing models, such as provisioning, procurement, training, support contracts and software licensing. Learn how to further reduce your current costs on AWS and improve your spend predictability.

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    AWS Summit 2013 | Singapore - Understanding the Total Cost of (Non) Ownership in the AWS Cloud AWS Summit 2013 | Singapore - Understanding the Total Cost of (Non) Ownership in the AWS Cloud Presentation Transcript

    • The Total Cost of (Non) Ownership in the AWS Cloud Kingsley Wood Business Development APAC
    • Infrastructure-as-a-Service Market Share Leader Leader in 2011 Gartner IaaS Magic Quadrant Leader in 2011 Forrester Hadoop Wave What Analysts are Saying about AWS
    • Gartner Magic Quadrant for Cloud Infrastructure as a Service
    • innovation
    • Powering the Most Popular Internet Businesses
    • Free steak campaign Facebook page Mars exploration ops Consumer social app Ticket pricing optimization SAP & Sharepoint Securities Trading Data Archiving Gene sequencing Marketing web site Interactive TV apps Financial markets analytics R&D data analysis Consumer social app Big data analytics Web site & media sharing Disaster recovery Media streaming Web and mobile apps Streaming webcasts Facebook app Consumer social app Every Imaginable Use Case
    • Thriving Partner Ecosystem Consulting Partners Technology Partners
    • Elastic On Demand Pay as you go Focus on YOUR business
    • 0 10 20 30 40 50 60 0 12 24 36 DatainTB Months Actual Storage Incremental Adoption Savings
    • 0 10 20 30 40 50 60 0 12 24 36 DatainTB Months Actual Storage Provisioned Incremental Adoption Savings
    • 0 10 20 30 40 50 60 0 12 24 36 DatainTB Months Actual Storage Provisioned Underutilized = Waste Incremental Adoption Savings
    • Traditional IT capacity Capacity Time Your IT needs Elastic Capacity
    • On and Off Fast Growth Variable Peaks Predictable Peaks Elastic Capacity
    • On and Off Fast Growth Predictable PeaksVariable Peaks WASTE CUSTOMER DISSATISFACTION Elastic Capacity
    • When you turn off your cloud resources, you actually stop paying for them
    • Elastic cloud capacity Traditional IT capacity Your IT needs Time Capacity Elastic Capacity
    • Fast GrowthOn and Off Predictable peaksVariable peaks Elastic Capacity
    • Hardware, Software, Database, Network : Procurement, Installation, Maintenance and Administration Costs
    • Amazon Web Services provides services and infrastructure to build reliable, fault-tolerant, and highly available systems in the cloud. These qualities have been designed into our services both by handling such aspects without any special action by you and by providing features that must be used explicitly and correctly.
    • “Just moving a system into the cloud doesn’t make it fault- tolerant or highly available.” aws.amazon.com/architecture
    • Putting it all together
    • Building Block Flexibility
    • 256 128 64 32 16 8 4 2 1 1 2 4 8 16 32 64 128 256 High I/O 4XL 60.5 GB 35 EC2 Compute Units 16 virtual cores 2*1024 GB SSD-based local instance storage EC2 Compute Units Memory(GB) Small 1.7 GB, 1 EC2 Compute Unit 1 virtual core Micro 613 MB Up to 2 ECUs (for short bursts) Large 7.5 GB 4 EC2 Compute Units 2 virtual cores $0.32/0.46 Hi-Mem XL 17.1 GB 6.5 EC2 Compute Units 2 virtual cores Hi-Mem 2XL 34.2 GB 13 EC2 Compute Units 4 virtual cores Hi-Mem 4XL 68.4 GB 26 EC2 Compute Units 8 virtual cores High-CPU Med 1.7 GB 5 EC2 Compute Units 2 virtual cores High-CPU XL 7 GB 20 EC2 Compute Units 8 virtual cores Medium 3.7 GB, 2 EC2 Compute Units 1 virtual core M3 XL 15 GB 13 EC2 Compute Units 4 virtual cores EBS storage only M3 2XL 30 GB 26 EC2 Compute Units 8 virtual cores EBS storage only Extra Large 15 GB 8 EC2 Compute Units 4 virtual cores 10 GB Inter-Instance Network Cluster GPU 4XL 22 GB 33.5 EC2 Compute Units, 2 x NVIDIA Tesla “Fermi” M2050 GPUs Cluster Compute 4XL 23 GB 33.5 EC2 Compute Units Cluster Compute 8XL 60.5 GB 88 EC2 Compute Units High Storage 8XL 117 GB 35 EC2 Compute Units, 24 * 2 TB ephemeral drives 10 GB Ethernet Hi-Mem Cluster Compute 8XL 244 GB 88 EC2 Compute Units 16 virtual cores 240 GB SSD
    • Go Global in Minutes
    • Global Infrastructure Components Regions An independent collection of AWS resources in a defined geography A solid foundation for meeting location-dependent privacy and compliance requirements Availability Zones (AZ) Designed as independent failure zones Physically separated within a typical metropolitan region Edge Locations To deliver content to end users with lower latency A global network of edge locations supports global DNS infrastructure (Route53) and Cloud Front CDN
    • 9 Regions US-WEST (Oregon) EU-WEST (Ireland) ASIA PAC (Tokyo) ASIA PAC (Singapore) US-WEST (N. California) SOUTH AMERICA (Sao Paulo) US-EAST (Virginia) GOV CLOUD ASIA PAC (Sydney) On a global footprint
    • 25 Availability Zones On a global footprint
    • US West Region (Oregon) Availability Zone A Availability Zone B Singapore Availability Zone A Availability Zone B EU West Region Availability Zone A Availability Zone C Availability Zone B Each Region has multiple Availability Zones. Availability Zones are distinct locations that are engineered to be insulated from failures in other Availability Zones and provide inexpensive, low latency network connectivity to other Availability Zones in the same Region.
    • 40 Edge Locations Dallas(2) St.Louis Miami JacksonvilleLos Angeles (2) Palo Alto Seattle Ashburn(2) Newark New York (2) Dublin London(2) Amsterdam Stockholm Frankfurt(2) Paris(2) Singapore(2) Hong Kong Tokyo Sao Paulo South Bend San Jose Osaka Milan Sydney Seoul On a global footprint
    • AWS Platform
    • Steady State Example: Corporate Data Logging Spiky Predictable Example: Marketing Promotions Website Uncertain Unpredictable Example: Web Apps Application Usage Patterns
    • On-Demand, Reserved Instances and Spot Multiple pricing models allow you to optimize costs for both variable and stable workloads
    • On-demand Instances • Pay as you go • Starts from $0.02/Hour Reserved Instances • One time low upfront fee + Pay as you go • $23 for 1 year term and $0.012/Hour Heavy Utilization Medium Utilization Light Utilization 1 and 3 year terms Save more when you reserve
    • 0 2 4 6 8 0 6 12 18 24 30 36 TrafficinInstances Months Traffic pattern Physical Reserved Steady State Usage Pattern
    • TCO Web Application - Steady State Usage Pattern Amortized monthly costs over 3 years On-Premises Option AWS Option 1 All Reserved (3-Year Heavy) AWS Option 2 Mix of On-Demand and Reserved AWS Option 3 All On-Demand Compute/Server Costs Server Hardware $306.36 $0.00 $0.00 $0.00 Network Hardware $62.04 $0.00 $0.00 $0.00 Hardware Maintenance $47.10 $0.00 $0.00 $0.00 Power and Cooling $172.02 $0.00 $0.00 $0.00 Data Center Space $144.48 $0.00 $0.00 $0.00 Personnel $1,200.00 $0.00 $0.00 $0.00 AWS Instances $0.00 $618.33 $1,079.42 $2,138.40 Total - Per Month $1,932.00 $618.33 $1,079.42 $2,138.40 Total - 3 Years $69,552.00 $22,260.00 $38,859.20 $76,982.40 Savings over On-Premises Option 68.0% 44.1% -10.7% Option 1: All Reserved Recommended Option (Most Cost-effective) Option 2: Mix of On-Demand and Reserved Option 3: All On-Demand Commitment-free and Risk-free Option TCO of Steady State Web Application
    • 0 2 4 6 8 10 12 0 6 12 18 24 30 36 TrafficinInstances Months Traffic Pattern Reserved Physical On-Demand Spiky Predictable Usage Pattern
    • When you turn off your cloud resources, you actually stop paying for them
    • Setting Threshold
    • Configure Action
    • TCO Web Application - Spiky Usage Pattern Amortized monthly costs over 3 years On-Premises Option AWS Option 1 All Reserved AWS Option 2 Mix of On-Demand and Reserved AWS Option 3 All On-Demand Compute/Server Costs Server Hardware $510.60 $0.00 $0.00 $0.00 Network Hardware $103.40 $0.00 $0.00 $0.00 Hardware Maintenance $78.50 $0.00 $0.00 $0.00 Power and Cooling $286.70 $0.00 $0.00 $0.00 Data Center Space $240.80 $0.00 $0.00 $0.00 Personnel $2,000.00 $0.00 $0.00 $0.00 AWS Instances $0.00 $992.16 $881.42 $1,940.40 Total - Per Month $3,220.00 $992.16 $881.42 $1,940.40 Total - 3 Years $115,920.00 $35,717.60 $31,731.20 $69,854.40 Savings over On-Premises Option 69.2% 72.6% 39.7% Option 1: All Reserved Option 2: Mix of On-Demand and Reserved Recommended Option (Most Cost-effective) Option 3: All On-Demand Commitment-free and Risk-free Option TCO of Spiky Predictable Web Application
    • 0 4 8 12 16 20 0 6 12 18 24 30 36 TrafficinInstances Months Actual Traffic Expected Traffic Reserved Physical On-Demand Uncertain Unpredictable Usage Pattern
    • TCO Web Application - Unpredictable Usage Pattern (Failure case) Amortized monthly costs over 3 years On-Premises Option AWS Option 1 All Reserved AWS Option 2 Mix of On-Demand and Reserved AWS Option 3 All On-Demand Compute/Server Costs Server Hardware $816.96 $0.00 $0.00 $0.00 Network Hardware $165.44 $0.00 $0.00 $0.00 Hardware Maintenance $125.60 $0.00 $0.00 $0.00 Power and Cooling $458.72 $0.00 $0.00 $0.00 Data Center or Co-located Space $385.28 $0.00 $0.00 $0.00 Personnel $3,200.00 $0.00 $0.00 $0.00 AWS Instances $0.00 $1,552.89 $1,275.46 $1,009.80 Total - Per Month $5,152.00 $1,552.89 $1,275.46 $1,009.80 Total - 3 Years $185,472.00 $55,904.00 $45,916.48 $36,352.80 Savings over On-Premises Option 69.9% 75.2% 80.4% Option 1: All Reserved Option 2: Mix of On-Demand and Reserved Option 3: All On-Demand Commitment-free and Risk-free Option Recommended Option (Most Cost-effective) TCO of uncertain unpredictable web application when it fails
    • 0 10 20 30 40 0 6 12 18 24 30 36 TrafficinInstances Months Actual Traffic Expected Traffic Reserved Physical On-Demand Disappointed Customers (On-Premises Option) Uncertain Unpredictable Usage Pattern (Success Case)
    • Incremental RI Purchases to grow a Resource Pool 0 5 10 15 20 25 30 35 1 2 3 4 5 6 7 8 9 10 11 12 E D C B A Reserved Instance Pool
    • Consolidated Billing
    • On-demand Instances • Pay as you go • Starts from $0.02/Hour Reserved Instances • One time low upfront fee + Pay as you go • $23 for 1 year term and $0.012/Hour Spot Instances • Requested Bid Price and Pay as you go • Varying…$0.005/Hour at 9am today Heavy Utilization Medium Utilization Light Utilization 1 and 3 year terms Save more money by using Spot Instances
    • Save more money by using Spot Instances
    • Spot Use cases Use Case Types of Applications Batch Processing Generic background processing (scale out computing) Hadoop Hadoop/MapReduce processing type jobs (e.g. Search, Big Data, etc.) Scientific Computing Scientific trials/simulations/analysis in chemistry, physics, and biology Video and Image Processing/Rendering Transform videos into specific formats Testing Provide testing of software, web sites, etc Web/Data Crawling Analyzing data and processing it Financial Hedgefund analytics, energy trading, etc HPC Utilize HPC servers to do embarrassingly parallel jobs Cheap Compute Backend servers for Facebook games
    • 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% PercentageoftheDistribution Bid Price as Percentage of the On-Demand Price Bid Distribution Typical Spot Bidding Strategies
    • Optimizing Video Transcoding Workloads Free Offering • Optimize for reducing cost • Acceptable Delay Limits Implementation • Set Persistent Spot Requests • Use on-demand Instances, if delayed on Spot Maximum Bid Price < On-demand Rate Get your set reduced price for your workload Premium Offering • Optimized for Faster response times • No Delays Implementation • Invest in RIs • Use on-demand for Elasticity Maximum Bid Price >= On-demand Rate Get Instant Capacity for higher price
    • • Security groups for EC2 and VPC Network ACL • Multi-Factor Authentication • CloudHSM • RDS Oracle transparent encryption • VPC • Direct connect • Dedicated instances • Identity & Access Management • S3 Encryption Comprehensive Security Capabilities to Support Virtually Any Workload
    • “Amazon Virtual Private Cloud offers an additional level of security and an ability to integrate with other aspects of our infrastructure.” Dr. Michael Miller Head of HPC for R&D Motion Picture Association of America Certifications & Accreditations for Workloads that Matter
    • The AWS Price Reduction Philosophy Ecosystem Global Footprint New Features New Services Infrastructure Innovation More AWS Usage More Infrastructure Economies of Scale Lower Infrastructure Costs Reduced Prices More Customers
    • Pay less when you use more
    • “It makes me look so good in front of my CFO. When he [CFO] sees the savings in our AWS monthly bill, he thinks that it is me who is working hard on driving the costs down and increasing efficiency of the company’s infrastructure. I get all the credit for all the hard work you guys are putting in.” CIO of F500 company
    • AWS Trusted Advisor Cost optimizations Security & Availability checks Performance recommendations 399,000 recommendations $69M in annualized savings Past 90 Days To: AWS Customer From: Amazon Web Services Subject: Potential Cost Savings Dear Customer, We have identified $49,000 of potential savings in your current AWS deployment. -Amazon Web Services To: AWS Customer From: Amazon Web Services Subject: Potential Cost Savings Dear Customer, We have identified $49,000 of potential savings in your current AWS deployment. -Amazon Web Services To: AWS Customer From: Amazon Web Services Subject: Potential Cost Savings Dear Customer, We have identified $49,000 of potential savings in your current AWS deployment. -Amazon Web Services Obsessed with Helping Customers Save Money
    • Ongoing Innovation drives Continuous Optimization in your architecture resulting in recurring savings as early as your next month’s bill
    • Enterprises are Adopting AWS to Achieve the Benefits of the Cloud ✔ ✔ ✔ ✔ ✔ Replace CapEx with OpEx Lower Overall Costs No More Guessing Capacity Agility / Speed / Innovation Shift Focus to Differentiation Go Global in Minutes ✔
    • The Benefits Of The Cloud 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 ✔
    • Forrester Foresights Survey data , Q3 2012 Self-service Portals 24% Resource Automation 27% Resource Tracking 29% Cost Chargeback 14% Customers are Struggling to Deliver on Promises of the “Private Cloud” Vendors Have you implemented these cloud features?
    • AWS Pricing Philosophy • Pay as you go – No minimum commitments or long-term contracts required – Capex -> Opex – Turn off when you don’t need it • Pay less per unit when you use more – Tiered Pricing and Volume Discounts • Pay even less when you reserve – Reserved pricing • Pay even less as AWS grows – Efficiencies, optimizations and economies of scale result in passing the savings back to you in the form of lower pricing
    • http://aws.amazon.com/tco-calculator/
    • How customers are saving money with AWS AWS Economics Center aws.amazon.com/economics TCO Whitepapers Calculator Tools aws.amazon.com/tco-calculator Case Studies IDC Report: The Business Value of AWS Accelerates Over Time
    • IDC Report • Commissioned by AWS in 2012 – 11 organizations • Highlights derived benefits – downtime reduction – productivity increases • Learn how they reduced TCO by an average of 70%
    • Kingsley Wood Business Development, APAC Thank You !