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AWS Cost Management Lessons from the Private Sector

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AWS Cost Management Lessons from the Private Sector

  1. 1. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015©2015, Amazon Web Services, Inc. or its affiliates. All rights reserved. AWS Cost Management Lessons from the Private Sector J.R. Storment Chief Custom Officer at Cloudability
  2. 2. @clo
  3. 3. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Cloud infrastructure analytics
  4. 4. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Why should I care about cost management?
  5. 5. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  6. 6. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 NEW WAY: Many little decisions every day by many different people
  7. 7. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Why does it need to be cultural?
  8. 8. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 The cloud is no longer one person’s responsibility… Engineers Finance Operations Capacity Executive
  9. 9. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  10. 10. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 How do you build the culture? • Put data in the hands of the people • Enact policies and evangelize best practices • Incentivize good behavior
  11. 11. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 What happens when it works? • There are no surprises • Everyone is on the same page • Make budgeting easier • Better decisions are made from engineer to CEO • Save money
  12. 12. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 A story of growth 0 45 90 135 180 225 Dev/Test POC App#1 App#3 App#2 Exec team starts really caringLoadtest
  13. 13. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost
  14. 14. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost
  15. 15. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost I. Cost visibility
  16. 16. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Two types of people Incur costs Watch costs
  17. 17. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Two types of people Incur costs Watch costs
  18. 18. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Two types of people Watch costs Incur costs
  19. 19. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Two types of people Incur costs Watch costs
  20. 20. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Two types of people Watch costs Manage costs
  21. 21. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Tips for cost visibility • Get each stakeholder the spending fundamentals daily • Let each team see other teams’ spending habits • Create broadly available dashboards
  22. 22. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  23. 23. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost II. Allocation
  24. 24. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 First, get everyone involved ๏ Multiple major business units ๏ Lots of products or cost centers ๏ Thousands of shared AWS resources ๏ Distributed teams using AWS
  25. 25. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Tools for splitting up resources • Tags are highly flexible, but 100% coverage is difficult due to compliance • Linked accounts offer clean chargeback but limit reporting options
  26. 26. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  27. 27. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Pro tips: Allocating Costs • Get consensus on the taxonomy (but let Finance drive) • Define 2-3 mandatory tags like “project” or “environment” • Consider a “tag or terminate” rule to enforce compliance
  28. 28. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost III. Efficiency
  29. 29. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 168 hours in a week
  30. 30. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 nights & weekends 108
  31. 31. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Don’t run the cloud like a data center: 65% of the hours in a month are nights and weekends
  32. 32. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Three easy wins for Amazon EC2 efficiency…
  33. 33. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Turn off underutilized instances Low CPU, low bandwidth, low disk I/O, >1 day old | This example: Save $1,682 per week
  34. 34. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Schedule Dev/Test downtime
  35. 35. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Find legacy instances that could be upgraded 1. Newer instance families are faster/cheaper but have smaller SSDs 2. Look for instances that have attached Amazon Elastic Block Store (Amazon EBS) and low ephemeral disk access 3. Move M1 to M3 to save $0.03-$0.10 Source: http://aws.amazon.com/ec2/pricing/
  36. 36. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Get alerts when thresholds are crossed
  37. 37. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Tips for encouraging efficient behavior 1. Automate weekly waste reporting for each team 2. Gamify cleanup by creating a visible leaderboard 3. Do a monthly, company-wide waste review
  38. 38. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost IV. Savings
  39. 39. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Spot vs Reserved Instances? Reservations require no engineering, enabling finance to autonomously reduce costs
  40. 40. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Buy Reserved Instances based on current hourly data Don’t wait to buy reservations until you’ve completed the perfect analysis—you’ll waste more money than you save
  41. 41. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  42. 42. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Aligning Reserved Instances to infrastructure is more important than ever because Reserved Instances are all sunk costs
  43. 43. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  44. 44. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015
  45. 45. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Tips for reservation efficiency 1. Appoint a person to own reservation purchases– often a tech- minded finance person 2. Start with an immediate small and uncontroversial buy 3. Buy iteratively on a schedule that you hold sacred
  46. 46. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost V. Unit Cost
  47. 47. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Why does unit cost matter? 0 45 90 135 180 225 Dev/Test POC App#1 App#3 App#2 Exec team starts really caring Hiccup
  48. 48. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Your bill may increase due to growth, not waste 0 45 90 135 180 225 0 45 90 135 180 225 The bill still goes up! StageIII Efficiency StageIV RIs
  49. 49. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Unit cost is cost per X
  50. 50. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 cost per user cost per subscriber cost per pageview cost per customer cost per API call
  51. 51. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Focus on reducing unit cost, even at total cost grows 0 30 60 90 120 150 Unit cost Total cost
  52. 52. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Unit cost = total cost / business metric
  53. 53. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 $1000 / 1000 customers = $1 unit cost
  54. 54. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Visibility Allocation Efficiency Savings Unit Cost
  55. 55. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 What does it look like in the real world?
  56. 56. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Case study: Enterprise with 100s of apps • Split the detailed billing reports into 750 different views broken down by BUs/applications/environments/etc. • Daily spending updates 800 users get daily emails with just their spending • Oversight for reporting and control Execs/finance see the total spending in a simple weekly digest "Our goal is to put control of AWS resources in each product team’s hands. We want to get out of the way but at the same time we still need oversight to stop overspending.”
  57. 57. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Casestudy: Scaledwebbusiness pushingunitcost • Product owners track unit cost daily tying spending to revenue • Operations examines infrastructure changes in terms of unit cost impact • Finance reports monthly & quarterly on margin impacts based on unit cost • VPs set goals on unit cost and worry less about setting arbitrary total cost goals Shortcut: Track your AWS bill as a percentage of revenue
  58. 58. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Increasing efficient useamongops/engineers • Lots of developers using dev/test instances and forgetting to turn them off • Used Cloudability API data to normalize dev/test environment “health” • Satisfied management’s need for spending visibility • Immediately found $5,000 in savings avg hourly node cost ($) x avg node uptime (%) x sq rt inverse of CPU util (%) x avg node running life (hrs) x avg daily unique nodes^1.3 Midge’s law
  59. 59. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Optimizingthousandsofreservedinstances • One team purchases Reserved Instances across Adobe using Cloudability • Implemented consistent monthly schedule for purchases to increase iteration 25th of the month: Central team drives decisions with minimal input from teams 26th of the month: Modifications made each month ahead of purchase 28th of the month: Purchase based on the current month’s utilization data Result: Exceeding 80% RI coverage, saving over 50% on EC2
  60. 60. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Getting started on your culture
  61. 61. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Things to do right after this summit I. Visibility: Set up a daily spending report for stakeholders II. Allocation: Meet with your finance team to determine the taxonomy for tags & linked accounts III. Efficiency: Look for underutilized instances (low CPU+BW+disk) and M3 candidates IV. Savings: Make an immediate small and uncontroversial Reserved Instance buy V. Unit cost: Determine a top-line business metric, divide last month’s costs by it
  62. 62. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Contact me • Booth 23 • @cloudability • jr@couldability.com
  63. 63. @cloudability@cloudability Coming to DC and NYC AWS Summits this Summer START A FREE 14-DAY TRIAL AT CLOUDABILITY.COM
  64. 64. AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015 Thank You. This presentation will be loaded to SlideShare the week following the Symposium. http://www.slideshare.net/AmazonWebServices AWS Government, Education, and Nonprofit Symposium Washington, DC I June 25-26, 2015

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