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Cost Optimisation on AWS

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Cost Optimisation on AWS

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Cost Optimisation on AWS

  1. 1. Bas de Natris Cost Optimization on AWS
  2. 2. A Couple Assumptions… 1. You’re using AWS… 2. You like it!! 3. But probably want to spend less
  3. 3. 16MM Ledger Saving Velocity = 50 apps/qtr. Operational CostsWorkforce ProductivityCost AvoidanceOperational ResilienceBusiness Agility • 98% reduction in P1/P0’s • 77% faster to deliver business applications • 52% average TCO savings • 35% reduction in compute assets (792) • 15 automated bots developed • 80% cloud first adoption • 15 cloud services created • 50 applications decommissioned • 8 cloud migration parties • Improved security posture • Shift to self-service culture • Rapid experimentation • Reduced technical debt • 14M YOY Savings • Improved Performance • Streamlined M&A Activity • DevOps in Practice Progress as of May 2016 14.2M Investment Focus 18 Months 311 Apps in Cloud & 14M YOY Savings Sample outcome – GE http://www.slideshare.net/AmazonWebServices/demystifying-cloud-economics-how-to-build-an-investment-case-for-scale-migration-to-the-cloud-business
  4. 4. AWS Pricing Philosophy More AWS Usage More Infrastructure Economies of Scale Lower Infrastructure Costs Reduced Prices More Customers Ecosystem Global Footprint New Features New Services Infrastructure Innovation We pass the savings along to our customers in the form of low prices and continuous reductions 51+
  5. 5. 1. Architect for Cost Efficiency „Pay for what You think you need“ 2. Optimize Usage Costs „Pay for what you use“ 3. Take Advantage of Benefits over Time „Pay for what you really need“ Cost Optimization with AWS
  6. 6. Proactively Monitor Your Account Billing Usage…
  7. 7. By Using Detailed Billing Reports and Enabling Billing Alerts…
  8. 8. …Alongside Cost Explorer http://amzn.to/1zHE2Fj
  9. 9. Fit your payment model to your business model: EC2 pricing plans On-Demand Instances Reserved Instances Spot Instances Pay as you go for computing power Flat hourly rate, no up-front commitments Pay an up-front fee for a capacity reservation and a lower hourly rate (up to 72% savings) 1-year or 3-year terms RI Marketplace: Buy RIs with short remaining terms Pay what you want for spare EC2 capacity: your instances run if your bid exceeds the Spot price Potential for large scale at low cost: When they’re available, take advantage of 1,000s of Spot Instances at up to 90% savings 10:00 10:05 10:10 10:15
  10. 10. Standard Reserved Instances • You commit to pay for an instance for one or three years • We reserve the capacity, and offer you considerable savings over On Demand during the term • You decide how you pay: • No Upfront (Just hourly charges for all hours of the term) • Partial Upfont (Upfront Payment, plus hourly charges for all hours of the term) • All Upfront (Upfront Payment only)
  11. 11. Self Service Reserved Instance Utilization Reports RI „Bucket“ On Demand - (Usage + amortized upfront fee) More Information: http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/usage-reports.html
  12. 12. • Base Price - On Demand: No Commitment, Pay only what you use, no capacity reservation but once started no interruption • 10% less - Scheduled Reserved Instances: Commit to Schedule of at least 1200 hours for one year, capacity reservation • 30-60% less - Standard Reserved Instances: Commit to one or three years, capacity reservation • 40-60% less - Spot Blocks: Bid for 2-6 hours blocks of uninterrupted time • Up to 85% less - Spot: Bid for instances, interrupted if market price higher than your bid price, 2mins advanced notice An EC2 Cost Optimization Option for every Need
  13. 13. Combine all the Options! 1. Start by using RIs for known/steady-state workloads 2. Set-up multiple autoscaling groups 3. Autoscale first using Spot first 4. If Spot instances are unavailable (or priced too high), use On-Demand 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 On Demand Spot Reserved Instance
  14. 14. Trusted Advisor: Enterprise Strength Monitoring and Optimization • Monitors and recommends optimizations for: – Cost – Security – Fault Tolerance – Performance • Available to customers with Business and Enterprise- level support • Now four checks available as free tier! http://aws.amazon.com/premiumsupport/trustedadvisor/ “Over the last couple years, we’ve sent more than 2.6 million Trusted Advisor notifications that have saved customers over US$350 million dollars.”
  15. 15. Trusted Advisor: Cost Optimization Tips
  16. 16. Leverage The Right Storage Classes… 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 Reduced Redundancy ‒ 99.99% durability vs. 99.999999999% • Amazon S3 Infrequent Access ‒ For data accessed less than two times a month • Amazon Glacier ‒ Same durability as S3 ‒ 3 to 5 hours restore time ‒ Up to 65% savings ‒ Great for archiving, long-term backups and old data • Amazon EBS ‒ SSD, general or provisioned IOPS ‒ HDD, throughput opt. or cold Amazon EFS
  17. 17. 1. Architect for Cost Efficiency „Pay for what You think you need“ 2. Optimize Usage Costs „Pay for what you use“ 3. Take Advantage of Benefits over Time „Pay for what you really need“ Summary: Cost Optimization with AWS
  18. 18. Intro toAmazon EC2 Dedicated Infrastructure Comparing Dedicated Hosts to Standard EC2 Instances  Multi-tenant servers host instances for multiple customers’ workloads  AWS determines which hosts instances run on  You pay per instance  Single-tenant servers host instances for one customer’s workloads  You can determine which hosts instances run on  You pay per host Standard Amazon EC2 Instances Amazon EC2 Dedicated Hosts EC2 Instance Customer 1 Customer 3 Customer 5 Customer 2 Customer 4 Customer 6 Customer X Amazon EC2 Dedicated Hosts Comparing Dedicated Hosts to Standard EC2 Instances Dedicated Hosts give you license flexibility Amazon EC2 Dedicated Instances Dedicated Infrastructure payment options Dedicated Hosts On-Demand Pricing Dedicated Reserved Instances Pricing Leveraging the power of the cloud compliantly
  19. 19. Intro toAmazon EC2 Dedicated Infrastructure Dedicated Hosts give you license flexibility When running Microsoft Workloads, for example:  Instance-host affinity allows you to comply with the 90 day rule  Per-core and per-socket visibility enables reporting at the physical level  Placement controls ensure that instances run on the server you want them to, helping you meet stringent compliance and regulatory requirements  AWS Config allows you to record when instances start, stop, or are terminated for license reporting and true-ups Amazon EC2 Dedicated Hosts Comparing Dedicated Hosts to Standard EC2 Instances Dedicated Hosts give you license flexibility Amazon EC2 Dedicated Instances Dedicated Infrastructure payment options Dedicated Hosts On-Demand Pricing Dedicated Reserved Instances Pricing Leveraging the power of the cloud compliantly
  20. 20. 1. Architect for Cost Efficiency 2. Optimize Usage Costs 3. Take Advantage of Benefits over Time
  21. 21. How do customers lower their TCO with AWS? 1 Source: IDC Whitepaper, sponsored by Amazon, “Quantifying the Business Value of Amazon Web Services” May 2015 “Average of 400 servers replaced per customer” Replace up-front capital expense with lower “pay for what you use” variable cost model 3 Periodic Price Reductions Economies of scale allow AWS to continually lower costs 4 Save more money as you grow bigger Tiered Pricing Volume Discounts 2 Pricing model choice to support variable & stable workloads On-Demand Reserved Spot Dedicated
  22. 22. Analysts have shown AWS reduces costs over long term Source: IDC, Quantifying the Business Value of Amazon Web Services (May, 2015)
  23. 23. …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
  24. 24. Comparing TCO is not easy (But We’re Going to Try) ≠
  25. 25. Elements of Infrastructure TCO Diagram doesn’t include every cost item. E.g. software costs can include database, management, 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. Hardware – Server, Rack Chassis PDUs, ToR Switches (+Maintenance) Hardware – Storage Disks, SAN/FC Switches Network Hardware – LAN Switches, Load Balancer Bandwidth costs Server Admin Virtualization Admin 1 2 3 4 Server Costs Storage Costs Network Costs IT Labor Costs Software - OS, Virtualization Licenses (+Maintenance) Storage Admin costs Network Admin Costs Facilities Cost Space Power Cooling Facilities Cost Space Power Cooling Facilities Cost Space Power Cooling
  26. 26. AWS TCO Calculator: Example Cost Savings http://awstcocalculator.com

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