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Managing Amazon AWS Costs

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Managing costs on the Amazon AWS cloud

Managing costs on the Amazon AWS cloud

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  • You may want to check out this webinar - Quota and User Management for AWS (http://convirture.com/webinars/webinar_quota.php?source=slide) from Convirture. The webinar will show how you can:
    • Centrally manage all your AWS accounts
    • Control user access via role-based access control (RBAC)
    • Define and enforce quota limits to manage costs and usage
    • Give your business customers self-service access to their AWS resources
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  • In order to control your AWS costs you will need to manage it manually at least or get some online solution that can provide you this option. i can forward you to this resource - http://blog.newvem.com/main/2011/11/save-your-cloudy-money-5-simple-manual-tips.html and I think that you will find some great other resources there. You also welcome to test drive your AWS costs using our online small tool at https://savings.newvem.com
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    Managing Amazon AWS Costs Managing Amazon AWS Costs Presentation Transcript

    • Cloudy Mondays Joe Kinsella, VP of Engineering, Sonian Twitter: @joekinsella, Blog: HighTechInTheHub.com November 2011 Managing AWS Costs
    • Agenda
        • Overview of AWS Bill
        • Available Tools
        • Top Reasons For Excessive Bill
        • 5 Steps To Reducing Bill
        • Cloud vs. Physical
        • Metrics To Manage
        • Cloud Control Demo
    • Early Warning Sign: Cloud Dropouts
        • Each month we see more cloud dropouts
        • E.g.
          • Company: Mixpanel
            • Real-time analytics platform launched in 2009
            • Funded by Sequoia & Y Combinator
          • Started using Rackspace cloud
            • Low initial cost
            • Fast deployment times
            • Consumption-based pricing
            • Cheap CPU performance
          • Issues as cloud usage scaled
            • One size fits all
            • Lack of access to high-end hardware
            • At mercy of neighbors
            • Costs
          • Solution
            • Rebuilt on dedicated infrastructure hosted at SoftLayer
        • Dropouts are early warning sign not everyone successful in the cloud
    • Amazon AWS Bill Is Complex
        • AWS bill details costs by
          • Service – e.g. EC2, S3, RDS
          • Region – e.g. US East, US West
          • Service item – Linux m1.large compute hours
        • Each service has multiple components to pricing
        • All pricing consumption-based
        • Pricing model very complex
        • Pricing changes periodically
    • Example: EC2 Pricing
        • EC2 Compute
          • Pay per compute hour by instance type and OS
          • List and reserved pricing
          • Spot pricing
          • Data transfer out or within regions
        • EC2 Block Store
          • Per GB of provisioned storage
          • I/O requests
        • EC2 Other
          • Elastic IP addresses by hour/remap
          • CloudWatch by metric per month
        • http://aws.amazon.com/ec2/pricing/
    • Limited AWS Tools For Managing Costs
        • Four primary tools available from AWS
          • Activity Report
          • Usage Report
          • Cost Calculator
          • Cloud Watch
        • Tools provide useful raw data that can be used in managing costs – but not complete solution
        • Tools sufficient for managing small deployments
        • Medium to large deployments require more than AWS currently provides
    • AWS Activity & Usage Reports
        • Activity report
          • Details costs by service
          • By service and account
          • Current and historical
        • Usage report
          • Export of usage by hour or day
          • Allows filtering on usage type
          • Minimal documentation on how to decipher usage information
        • Using reports with accounts
          • AWS supports designating single account for consolidated bill
          • Common practice to designate empty account for consolidated bill
          • Multiple accounts often used to work around lack of sub-accounts
      Activity Report Usage Report
    • Other AWS Tools
        • Monthly calculator
          • Simple calculator to project costs based on usage
          • Good for getting back of napkin estimates on costs
        • CloudWatch
          • Real-time and trended metrics on usage of provisioned infrastructure
          • Basic metrics provided for free
          • Allows understanding of actual consumption of provisioned infrastructure
    • 3 rd Party Tools
        • New and emerging market for cloud asset & cost management
        • Dominated by early stage startups
        • Products immature and take very different approach to managing costs
        • E.g.
          • Ylastic, Cloudability, CloudVertical, Sensible Cloud, RaveId, Cloud Cruiser
    • Top Reasons For High AWS Bills
        • Lack of understanding of what software actually costs to operate
        • Lack of understanding of infrastructure & its usage
        • Over optimism on infrastructure lifespan
        • Not taking advantage of all available AWS options to manage costs
        • Lack of infrastructure standardization
        • Inattention to the pricing outliers
        • Human error
    • 5 Step Process To Managing Your Bill
        • Gain visibility
        • Define blueprint
        • Manage capacity
        • Rightsize
        • Optimize
        • http://www.hightechinthehub.com/2011/09/5-steps-to-managing-cloud-costs/
    • Step 1: Gain Visibility
        • Decide on tool to provide near real-time visibility into your infrastructure, e.g.
        • E.g. AWS console, custom application, Ylastic, Excel spreadsheet
        • Ensure tool supports correlating infrastructure and application
        • Cannot understand costs without knowing how application uses infrastructure
        • Adopt tool that allows customization
    • Step 2: Define Blueprint
        • Define reference architecture for application(s)
        • Goal: use as close to 100% of provisioned infrastructure without impacting availability & performance
        • Reference architecture should capture all required infrastructure by functional cluster
          • E.g. node sizes, attached storage, production vs. non-production
        • Create cost model for reference architecture
        • Perform R&D to optimize cost model
      Sample Reference Architecture
    • Step 3: Manage Capacity
        • Define capacity management policy for each functional clusters
          • Identify all metrics for scale (e.g. # concurrent users, # transactions per second)
          • Identify thresholds for capacity alarms (warning, critical) for both under and over-capacity
          • Identify “run book” for handling capacity constraints
        • Automate alarms through proactive monitoring
        • Iteratively tune policy to use as close to 100% of provisioned infrastructure as possible
    • Step 4: Rightsize
        • Start to standardize all infrastructure to reference architecture
        • Target infrastructure for rightsizing
          • Non-standard – infrastructure that deviates from reference architecture
          • Underutilized – infrastructure that can be consolidated based on capacity management policy
          • Unused infrastructure – infrastructure that is used infrequently or not at all
        • Implement iteratively over time to minimize disruption
    • Step 5: Optimize
        • Optimize costs through use of reserved & spot instances
        • Reserved instances
          • Purchase reserved instances based on reference architecture & growth projections
          • Reserved instances are limited by region - don’t paint yourself in corner
          • Can purchase for 1 or 3 years
          • Cost savings: 40% cost reduction on compute
        • Spots
          • Great for managing capacity bursts
          • Requires architecture that support idempotence
          • Cost savings: 20% reduction on compute
        • True “gaming the cloud” requires right software architecture
    • Identify Metrics To Manage
        • Cloud suffering from lack of standard metrics to measure
        • Most metrics over focus on costs
        • Identify & trend metrics that matter to your organization
        • Some to consider:
        • Infrastructure Cost of Goods Sold (ICOGS) = current infrastructure costs / revenue
        • Infrastructure Utilization (IU) = utilization of metric / maximum available quantity
        • Cloud Elasticity (CE) = (ICOGS at projected 12 month maximum revenue – current ICOGS) / current ICOGS
        • Infrastructure Hourly Rate (IHR) = cost for all infrastructure in hour
      Cloud Moneyball
    • Comparing Costs: Cloud vs. Physical
        • Cloud is more expensive than physical infrastructure for always-on
        • Cloud wins year 1, physical wins year 2+
        • Cloud optimized for
          • Sometimes-on infrastructure
          • Always-on where physical alternative underutilized
        • Typical reasons for underutilization
          • Incorrect growth projections
          • Building for peak utilization
          • Building ahead of growth
          • Building for temporary utilization
    • Demo: Sonian CloudControl (internal app)