Running Lean on AWS Pieter Kemps AWS Business Development & Venture Capital
What is Cloud Computing?An analogy: think of electricity services… You simply plug into a vast electrical grid managed by experts to get a low cost, reliable power supply – available to you with much greater efficiency than you could generate on your own.Power is a utility service - availableto you on-demand and you payonly for what you use.
Cloud Computing is a utility service - giving you access to technology resources managed by experts and available on-demand, available to you with much greater efficiency than you could generate on your own.You simply access these servicesover the internet, with no up-front costs andyou pay only for the resources you use.
Regions AWS An independent collection of AWS resources in a defined geography A solid foundation for meeting location-dependent Global privacy and compliance requirements Availability Zones (AZ)Infrastructure Designed as independent failure zones Physically separated within a typical metropolitan region Components 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
On a global footprint Region US-WEST (Oregon) EU-WEST (Ireland) GOV CLOUD ASIA PAC (Tokyo) US-EAST (Virginia)US-WEST (N. California) ASIA PAC (Singapore) SOUTH AMERICA (Sao Paulo) ASIA PAC (Sydney)
On a global footprint Edge Locations London(2) Seattle South Bend New York (2) Amsterdam Newark Dublin Stockholm Palo Alto TokyoSan Jose Frankfurt(2) Paris(2) Ashburn(2) Milan Osaka Los Angeles (2) Jacksonville Dallas(2) Hong Kong St.Louis Miami Singapore(2) Sydney Sao Paulo
Each Region has multiple Availability Zones. Availability Zones are distinct locations that are engineered to be insulated from failures inother Availability Zones and provide inexpensive, low latency network connectivity to other Availability Zones in the same Region. EU West Region Availability Availability Zone A Zone B US West Region (Oregon) Singapore Availability Zone C Availability Availability Availability Availability Zone A Zone B Zone A Zone B
Which company……grew to 14 million users in just over a year…reached 150 million photos & terabytes of data…signed up 10 million users in 12 hours after launching an Android app …with only 3 engineers?
“Amazon Web Services is probably the mostimportant thing that has happened to mobileand web app developers that the press justmisses. Jeff Bezos has accidentally or maybeon purpose powered a whole generation ofapplications.” Steve Blank, author of “The Four Steps to Epiphany”
“a whole generation of application…on AWS”E-commerce Gaming Social MediaMedia Sharing Mobile Apps SaaS Big Data – Hadoop, HPC, etc Storage, backup, and disaster recovery Ad hosting and analytics Life Sciences (sequencing, simulation, etc.)
idea demo scale monetize01 02 03 04 How do I How do I How do I run develop fast deal with lean and and get to unpredictable continue to grow market faster? demand & scale my revenue? up easily?
Experiment More & Develop FasterLaunch your infrastructure in a few clicks so you can ReduceTime to MarketPay only what for you use, with no commitment and lock in, so youcan Experiment More at Lower CostsLeverage community support, SDK’s, libraries, and more toachieve Shorter Development Cycles
“AWS was the clear choice for us. They enabled us to launch our cloudsolution quickly with reliable, uninterrupted, secure service to our customers.” Jaspreet Singh, Founder & CEO
Getting Started = FREE Elastic Compute Cloud (EC2) Simple Storage Service (S3) DynamoDB & SimpleDB Simple Workflow (SWF) Simple Queue Service (SQS) Simple Notification Service (SNS) Relational Database Service (RDS) CloudWatch Data Transfer“AWS Free Usage Tier = more startups. Awesome” Tweet by Eric Ries
Full Elasticity for Maximum ScalabilityScale to 1000s of servers in minutesFully automate the process of scaling up & downAdd billions of objects with Amazon S3Globally distribute petabytes of dataSelect any level of desired throughput
“AWS is great for scalable requirements, whether you need toscale up quickly, or even to scale down quickly, if required.” Vishal Gondal, CEO of Indiagames
Reduce Costs & Grow revenue Pay only what for you use, with no commitment and lock in, so No Up-Front Capital Expense Leveraging our large scale, we have reduced our prices 19 times in the last years, leading to Low Costs AWS removes undifferentiated heavy lifting – allowing you to focus70:30 on your business and Generate Revenue
"With the time savings that the IT and development staffs obtain fromthe solution, AWS gives us an overall cost benefit of about 30-40%.”
When calculating TCO…#1 Start by understanding your use cases & usage patterns
Usage PatternsOn and Off Fast GrowthVariable peaks Predictable peaks
Traditional HW / Hosting WASTE On and Off Fast Growth Variable peaks Predictable peaks CUSTOMER DISSATISFACTION
AWS = Elastic Capacity On and Off Fast Growth Variable peaks Predictable peaks
When calculating TCO…#1 Start by understanding your use cases & usage patterns#2 Apples to Apples – Take all the fixed costs into consideration
When calculating TCO…#1 Start by understanding your use cases & usage patterns#2 Apples to Apples – Take all the fixed costs into consideration#3 Leverage economies of scale & price cuts
Each day AWS adds theequivalent server capacity topower Amazon when it was a global, $5.2B enterprise (circa 2003)
Massive economies of scale and efficiencyimprovements allow us to continually lower prices – 26 price cuts in last 6 years
When calculating TCO…#1 Start by understanding your use cases & usage patterns#2 Apples to Apples – Take all the fixed costs into consideration#3 Leverage economies of scale & price cuts#4 Take a look at what’s included: Intangible Cost Savings !
Did you know? Free Usage Tier Free Services Data Transfer New Customers Amazon EC2 AWS Elastic Beanstalk No Charge for Amazon RDS AWS CloudFormation Amazon ELB AWS IAM Inbound Data Transfer Amazon S3 Auto Scaling Amazon EBS Consolidated Billing Data Transfer between Instances within anFor All Customers Availability ZoneAmazon SQS/SNSAmazon DynamoDB Amazon SES Amazon SWF And more…
Multiple pricing models allow you tooptimize costs for both variable andstable workloads
Save more when you reserve On-demand Reserved 3 versions: Instances Instances • Light Utilization RI• Pay as you go • One time low upfront • Medium Utilization RI fee + Pay as you go • Heavy Utilization RI 2 terms:• Starts from • $23 for 1 year term • 1-year $0.02/Hour and $0.01/Hour • 3-year Utilization RI option Savings over On-Demand <10% On-Demand 10% - 40% Light Utilization RI Up to 56% 40% - 75% Medium Utilization RI Up to 66% >75% Heavy Utilization RI Up to 71%
Pinterest attracted almost 18 million visitors in March, a 50% increase fromFebruary (ComScore). One of the fastest growing sites in the history of the web… • 80 million objects stored in S3 with 410 terabytes of user data • 150 EC2 instances in the web tier • 90 instances for in-memory caching • 35 instances used for internal purposes • 70 master databases with a parallel set of backup databases in different regions around the world for redundancy
• 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. The difference is an amazing 71%
Save more money by using Spot Instances On-demand Reserved Spot Instances Instances Instances• Pay as you go • One time low upfront • Requested Bid Price fee + Pay as you go and Pay as you go• Starts from • $23 (1 year) • Varying…$0.005/Hour $0.02/Hour $0.01/Hour at 9am today Up to 85% savings over On Demand pricing
Spot Use casesUse Case Types of ApplicationsBatch 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 biologyVideo and Image Transform videos into specific formatsProcessing/RenderingTesting Provide testing of software, web sites, etcWeb/Data Crawling Analyzing data and processing itFinancial Hedgefund analytics, energy trading, etcHPC Utilize HPC servers to do embarrassingly parallel jobsCheap Compute Backend servers for Facebook games
“Give me 4 fault tolerant algorithms and I can pick thebest 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.” An engineer named Werner Vogels, CTO, Amazon
Lowering Costs with “Best Practice Architecting” 1. CACHE at the edge to offload static and dynamic content 2. DRY (‘Don’t Repeat Yourself’) 3. LOAD BALANCE from the start 4. AUTO SCALING done right 5. PILOT LIGHT for smart & cost effective DR 6. DATABASE smarts 7. A/B TEST for rapid prototyping & innovation
Reduce EC2 Costs by Caching & Off-loadingCACHE at the edge to offload static & dynamic content• reduce your compute demand and costs• improve end-user experience• increase reliability and durability +
Reduce Costs of Storage by using S3 “RRS”DRY (don’t repeat yourself)• original vs. derived assets : 33% savings• single reference and consistency• control, accurate logs and tracking S3 (or Glacier) RRS
Lowering Costs with “Best Practice Architecting” LOAD BALANCE from the start • ready for massive scale, high reliability • uninterrupted growth and evolution • stateless and redundant array Availability Zone Availability Zone
Lowering Costs with “Best Practice Architecting” 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)
Reduce Costs of DR with “Pilot Light” design PILOT LIGHT for smart & cost effective DR • In traditional IT, Disaster Recovery (DR) is an after-thought • Costs of DR site are often an additional 80% of main DC • Problems occur in Layer 8 of OSI-model (anyone?) • With AWS, DR can be built into your architecture • Example: ‘Pilot Light’ design, which is cost effective and provides fast Recovery Time Objective / Recovery Point Objective It looks like this…
Basic level EC2 Provisioned yet DormantSingapore Region US East Region
Auto scaling Group Start up in minutes, Auto scale up in minutes Auto scaling Group Resize to production Capacity and/or add read replicasSingapore Region US East Region
Best Practices DATABASE smarts • scale out and share work • optimal performance, minimize load • enhance reliability, ensure data safety • cost reduction Availability Zone Availability Zone
Reduce Costs of Test/Dev and A/B Testing A/B TEST for rapid prototyping & innovation • inexpensive idea validation • seamless switch over and versioning • rapid dev / test agility
AWS Pricing PhilosophyPay as you goPay less per unit when you use morePay even less when you reserve • Reserved pricingPay even less when you architect for cost optimization • Smart architecting and leveraging AWS managed servicesPay even less as AWS grows • AWS economies of scale result in continuous price reductions What does this look like in practice?
An exampleEnterprise software provider in APACFocused on SaaS for storage, security, collaboration, etc.Backed by leading VC’s in the regionStrong growth – winning customers globallyFocused on profitability & reducing unit costsWorked closely with the AWS team to optimize its architecture
Profit Growth 54% reduction in unit costs -10% -20% -22% -18%price drop RI purchase Migration Price drop in in S3 Cassandra S3 of 25% to Dynamo
Questions? Pieter KempsAWS Business Development & Venture Capital