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AWS Enterprise Summit Netherlands - Cost Optimisation at Scale

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Cost Optimisation at Scale

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AWS Enterprise Summit Netherlands - Cost Optimisation at Scale

  1. 1. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Mario Thomas Senior Consultant EMEA AWS Professional Services 21 September 2016 Cost Optimisation at Scale Reducing the cost of using AWS
  2. 2. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. What We’ll Cover Today • A quick overview of TCO • Does “at scale” apply to you? • Applying “architecting for cost” principles to your TCO analysis and your AWS account(s) • Recap
  3. 3. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. What is TCO? Definition: Comparative total cost of ownership analysis (acquisition and operating costs) for running an infrastructure environment end-to-end on-premises vs. on AWS. Used for: 1) Comparing the costs of running an entire infrastructure environment or specific workload on-premises or in a co-location facility vs. on AWS 2) Budgeting and building the business case for moving to AWS
  4. 4. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. AWS Includes Everything In It’s Price Hardware in a Data Center
  5. 5. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost is Rarely the Only Reason to Choose AWS Pay-as-you Go Model Lower Overall Costs Stop Guessing Capacity Agility / Speed / Innovation Avoid Undifferentiated Heavy Lifting Go Global in Minutes ✔ ✔ ✔ ✔ ✔ ✔ On- Premise/ Co-Location X X X X X X
  6. 6. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Businesses are migrating IT to cloud I'm not going to sell another aircraft engine because I run a global data center operation really well. That's AWS's differentiator in the environment. Jim Fowler, CIO General Electric (2015) 2014 2017 34 Data Centers 4 Data Centers
  7. 7. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cloud can be a better solution that build We work closely with AWS to develop a security model, which we believe enables us to operate more securely in the public cloud than we can in our own data centers. Rob Alexander, CIO Capital One (2015) 2014 2017 8 Data Centers 3 Data Centers
  8. 8. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Trend: Retirement of Legacy Technology Debt From 6 Data Centers to 2. Time to market reduced by 6 months. Productivity up 100% in front end-processes; up 40% in back-end processes. Closed 8 Data Centers. Queries 98% faster, 80% cheaper than previous data warehouse solution. Data Center server footprint cut 91%. $ 3.5M saved over 5 years. 75% ops migrated to AWS. $ 20M annual savings. Saved 50% in CAPEX by exiting Data Centers. From 40 Data Centers to 6. 25% cost savings vs. colo. 30% faster development Migrated 500+ servers, closed Data Centers, cut costs by 40%, grew productivity over 30%. (Italy) Reduced CAPEX 30%. PCI-DSS compliant within 3 months.
  9. 9. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. So how do we do it? ≠
  10. 10. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Traditional Data Centers are costly and inefficient… Initial Fixed Capacity Utilization Unused Capacity = Wasted $ Downtime, Lost Customers, Lost Revenue (Impossible to measure) More Wasted $ Time
  11. 11. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. TCO = acquisition costs + operations costs Hardware – Server, Rack Chassis PDUs, ToR Switches (+Maintenance) Software - OS, Virtualization Licenses (+Maintenance) Facilities Cost Hardware – Storage Disks, SAN/FC Switches Storage Admin costs Network Hardware – LAN Switches, Load Balancer Bandwidth costs Network Admin costs Server Admin / Virtualization Admin4 Diagram doesn’t include every cost item. For example, software costs can include database, management, and 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. Space Power Cooling Facilities Cost Space Power Cooling Facilities Cost Space Power Cooling Server Costs Storage Costs Network Costs IT Labor Costs 1 2 3
  12. 12. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Efficiency Category Efficiency p/app % of Total Business Productivity 181,669.00$ 41% IT Staff Productivity 133,389.00$ 30% IT Infrastructure Cost Reduction 131,073.00$ 29% Total 446,131.00$ 100% Source: 2015 Study on AWS Value The opportunity cost of on-premise IT • Only 29% of the benefits of AWS Cloud are from IT cost reduction • 41% of the AWS Cloud opportunity is increased productivity IDC projects that organizations using AWS will realize increased revenue and productivity benefits worth an average of $173,003 per application per year over five years, or $7.04 million per organization
  13. 13. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. …and that these benefits increase over time 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. $1 Investment in AWS $8.40 in benefits At 60 Months of using AWS ~8X $3.50 in benefits $1 Investment in AWS At 36 Months of using AWS ~3X
  14. 14. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. The TCO Window $ 1 2 3 4 50 TCO Migration Cost Cost Optimising / BAU Current / Do Nothing AWS Environment Payback Period Time (Months) Cost
  15. 15. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Optimisation $ $ Paying for what you use Paying for what you need
  16. 16. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. The four pillars of cost optimisation Right sizing Reserved Instances Increase elasticity Measure, monitor, and improve
  17. 17. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Optimisation Simple Stimulating Stretching Consolidated Billing Permissions Tagging Idle Resources Design for Elasticity Instance Right Sizing Storage Purchasing Options OS Licencing Offloading Architecture Higher Level Services
  18. 18. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. 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
  19. 19. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Permissions How are you controlling the provisioning of resources? Control who can provision resources
  20. 20. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Tagging • Use tagging to identify resources • Use tags to audit resources • Turn off untagged resources
  21. 21. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Idle Resources • Dev/Test (Non-Prod) instances • Use simple instance start/stop, or • Tear down/build up altogether • Instances are disposable
  22. 22. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Instance Right Sizing Right sizing • Selecting the cheapest instance available while meeting performance requirements • Looking at CPU, RAM, storage, and network utilization to identify potential instances that can be downsized • Leveraging Amazon CloudWatch metrics and setting up custom RAM metrics Rule of thumb: Right size, then reserve. (But if you’re in a pinch, reserve first).
  23. 23. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Use Amazon CloudWatch to collect and track metrics CloudWatch Match resources to workload
  24. 24. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon CloudWatch monitoring Basic • 7 metrics for Amazon EC2 including: • CPU utilization • Data transfer • Disk usage and more • 5-minute frequency • Metrics for Amazon EBS, Amazon DynamoDB, Amazon RDS, etc. Detailed • 1-minute frequency • Aggregation by instance type and AMI
  25. 25. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Instance families: Example Instance vCPU Mem (GiB) Monthly price (3-yr AURI ) Ideal use case c4.2xlarge 8 15 $125.44 Best price-compute performance m4.2xlarge 8 32 $137.25 Balanced r3.2xlarge 8 61 $179.25 Lowest cost per GiB RAM r3.xlarge 4 30.5 $89.61 Lowest cost per GiB RAM
  26. 26. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. t2.medium 4 GiB RAM Baseline performance: 40% Bursts beyond this based on CPU credits Less than $18 per month Details: http://amzn.to/1sl2bKa Web servers, dev, small databases t2
  27. 27. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. t2 vs m3.medium or c4.large Instance vCPU Mem (GiB) Monthly price (3-yr AURI ) Ideal use case m3.medium 1 3.75 $19.08 Always available, balanced c4.large 2 3.75 $31.36 Always available, compute t2.medium 2 4 $16.86 Bursty workloads
  28. 28. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Savings potential If t2 works for you • 11%: Switch from m3.medium to t2.medium • 46%: Switch from c3.large to t2.medium Instance optimization • 9%: Switch to c4 for compute-intensive apps (m4.2xl -> c4.2xl) • 35%: Switch to r3 for memory-intensive apps (m4.2xl -> r3.xlarge)
  29. 29. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Storage 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 Standard Infrequent Access ‒ Lower cost of storage • Amazon S3 Reduced Redundancy ‒ 99.99% durability vs. 99.999999999% ‒ Up to 20% savings ‒ Great for files that are 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
  30. 30. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Instance Purchasing Options On-Demand Pay for compute capacity by the hour with no long-term commitments For spiky workloads, or to define needs Reserved Make a low, one-time payment and receive a significant discount on the hourly charge For committed utilization Spot Bid for unused capacity, charged at a Spot Price which fluctuates based on supply and demand For time-insensitive or transient workloads
  31. 31. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Reserved Instances Commitment Level 1 Year 3 Year AWS Services Offering RIs Amazon EC2 Amazon RDS Amazon DynamoDB Amazon Redshift Amazon ElastiCache * Dependent on specific AWS service, size/type, and region
  32. 32. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Reserved Instances Step 1: RI Coverage • Cover always on resources Step 2: RI Utilization • Leverage RI flexibility to increase utilization • Merge and split RIs as needed Rule of thumb: Target 70-80% always on coverage and 95% RI utilization rate.
  33. 33. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. • Be Fault Tolerant • Workloads should be Stateless • Loosely Coupled workloads preferred • If possible, deploy to Multiple AZs • Instant Flexibility is king • Take advantage of the 2 minutes warning • There is always Spot capacity available¢ Save up to 90% compared to On-Demand¢ What could your team do with a 10,000 core data center that costs $100 per hour, with one click? Spot Instances
  34. 34. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Spot Instances Pricing • Up to 90% discount Elastic • Minimum Commitment • Commit to 1 hour • Tradeoff • Potential for interruption Picking the right Spot Bid Price - Tolerance for interruptions, % likelihood of termination
  35. 35. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. 0 2 4 6 8 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 /Spot Mixed Use 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 AWS Services Offering RIs • Amazon EC2 • Amazon RDS • Amazon DynamoDB • Amazon Redshift • Amazon ElastiCache On Demand Spot RI
  36. 36. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. OS Licensing • Utilise Amazon Linux • Supported by Amazon • No licence fees • Regularly updated • Savings of up to 30% over other options*
  37. 37. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Offload Your Architecture Standard Setup • 4 x Medium Instances $485 • AWS Data Transfer 1 TB $194 • Total = $679
  38. 38. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. 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
  39. 39. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Design for Elasticity Turn off non-production instances • Look for dev/test, non-prod instances that are running always-on and turn off Autoscale production • Use Auto Scaling to scale up and down based on demand and usage (e.g., spikes) Rule of thumb: Shoot for 20-30% of EC2 instances running on demand to be able to handle elasticity needs.
  40. 40. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Use Auto Scaling or queue-based approaches to add resources when needed, and turn them off when not Amazon SQS Queue Auto Scaling
  41. 41. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. 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. Compatible 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 Use Auto Scaling Amazon CloudWatch
  42. 42. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Utilization and Auto-Scaling: Granularity More small instances vs. less large instances 29 Large @ $0.32/hr = $9.28 59 Small @ $0.08/hr = $4.72
  43. 43. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Utilization and Auto-Scaling: Lost $ / Lost Customers Initial Fixed Capacity Utilization Unused Capacity = Wasted $ Downtime, Lost Customers, Lost Revenue (Impossible to measure) More Wasted $ Time
  44. 44. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Higher Level Services AWS Lambda Elastic Load Balancing Amazon ECR Amazon CloudFront Amazon EFS Amazon Glacier Amazon S3 Amazon DynamoDB Amazon ElastiCache Amazon RDS Amazon Redshift Amazon VPC Amazon Route 53 AWS KMS AWS WAF Amazon Elasticsearch Service Amazon EMR Amazon Kinesis Amazon Machine Learning AWS IoT Amazon WorkSpaces
  45. 45. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Higher Level Services Amazon RDS Multi-AZ High availability with a mouse click Set up primary and standby instances Set up identical volumes Create synchronous replication Create and manage DNS entries Detect instance failure conditions Detect network failure conditions Detect storage failure conditions … ... ... Decide when to fail over Re-establish primary secondary connections Do-it-yourself MySQL replication Potentially ~100+ manual steps
  46. 46. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Reviewing & Reporting
  47. 47. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Detailed billing reports and cost insights
  48. 48. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Detailed Billing Reports http://amzn.to/1swNwLV
  49. 49. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Cost Explorer
  50. 50. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Forecasting
  51. 51. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Budgeting
  52. 52. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. AWS Well Architected • Security • Reliability • Performance • Cost Optimisation https://d0.awsstatic.com/whitepapers/architecture/AWS_Well- Architected_Framework.pdf
  53. 53. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Creating a culture of cost transparency Targets and Metrics Cloud Competency Center AWS Enterprise Support
  54. 54. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Metrics & targets % Instances turned off daily % of Instances Right-Sized % Always on Resources Covered by RIs % RI Utilization ✔ ✔ ✔ ✔ ✘ ✘ ✘ ✘ Set up metrics to define success and track progress
  55. 55. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Recap Simple Stimulating Stretching Consolidated Billing Permissions Tagging Idle Resources Design for Elasticity Instance Right Sizing Storage Purchasing Options OS Licencing Offloading Architecture Higher Level Services
  56. 56. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. If you need extra help
  57. 57. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. AWS Professional Services • A global team of consultants across EMEA, APAC and the Americas • Work with Enterprise and mid-market customers across many industries • Specialists in IT Transformation, Security, DevOps, Big Data and Infrastructure • Medium to long-term engagements of one month or more • Provide guidance, advice, best practice and accelerates adoption
  58. 58. Partners
  59. 59. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Resources to get you started AWS TCO Calculator https://awstcocalculator.com AWS Economics Centre http://aws.amazon.com/economics/ Case Studies & Research http://aws.amazon.com/economics/
  60. 60. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Email me if you have any questions about today’s presentation: mario@amazon.com Thank You!

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