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IDC and AWS Joint Webinar: Getting the most bang for your buck with EC2 Spot -

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Learning Objectives:
• Learn best practices that enable more proactive, timely, and innovative applications
• Learn how to deliver more value to users and customers in the form of features and functionality that stem from having access to highly cost-effective compute resources
• Leverage lower compute costs to better compete on price and, as a result, win more business

Amazon EC2 provides you with the flexibility to cost optimize your computing portfolio through purchasing models that fit your business needs. With the flexibility of mix-and-match purchasing models, you can grow your compute capacity and throughput and enable new types of cloud computing applications with the lowest TCO.

In this session, we will explore combining pay-as-you-go (On-Demand), reserve ahead of time for discounts (Reserved), and high-discount spare capacity (Spot) purchasing models to optimize costs while maintaining high performance and availability for your applications. IDC will present a summary of the business value and best practices AWS customer have used to achieve five-year ROIs of 220% and 14% faster application delivery.

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IDC and AWS Joint Webinar: Getting the most bang for your buck with EC2 Spot -

  1. 1. Getting the Most Bang for Your Buck with Amazon EC2 Spot Instances April 26, 2017 Larry Carvalho IDC Research Manager, Cloud Platform and Developer Services Matthew Marden IDC Research Manager, Business Value Strategy Practice Joshua Burgin General Manager – Amazon EC2 Spot Instances Amazon Web Services © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Will White VP Platform Mapbox
  2. 2. Agenda Amazon EC2 Spot Instances and Cloud Compute Snapshot of IDC Study Results Customer Highlights from IDC Study Business benefits of Amazon EC2 Spot Instances
  3. 3. $0 $75 $150 $225 $300 2014 2015 2016 2017 2018 2019 2020 $B Dedicated Hosted Private IaaS PaaS SaaS Cloud Adoption and Spending Continues to Grow 3
  4. 4. Some IDC 2020 Cloud Predictions… ▪ New cloud compute options and pricing models serve specific analytics workloads, driving 5X higher growth in spending on cloud vs. on-premises analytics ▪ 50% of the G2000 will see the majority of their business depend on their ability to create digitally- enhanced products, services and experiences. 4 … shows that technology is becoming a key competitive enabler
  5. 5. Customers Gain Value by…. 5 ▪ Proactive, timely, and innovative application and service development ▪ Value to users and customers with unique features and functionality ▪ New business models ▪ Winning more business with price competition … delivering value in multiple ways to the bottom line
  6. 6. Agenda Amazon EC2 Spot Instances and Cloud Compute Snapshot of IDC Study Results Customer Highlights from IDC Study Business benefits of Amazon EC2 Spot Instances
  7. 7. Reduced Time Project Acceleration Scale higher to reduce time to results: shorter wait times, greater agility, faster innovation cycles The Cloud Way: Scalability when Needed 7
  8. 8. AWS Pricing Principles Pay as you go Pay less when you reserve Pay less when AWS grows No up-front investment 8
  9. 9. Amazon EC2 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 1 or 3 year commitment and receive a significant discount over on-demand For committed or baseline utilization Spot Pay market price for unused compute capacity at a steep discount over on-demand For fault tolerant, time- insensitive or transient workloads 9
  10. 10. EC2 On-Demand Pricing Short-term, spiky and unpredictable Low cost and flexible Develop and test 10
  11. 11. EC2 Reserved Pricing Upfront payments to reduce costs Steady state Optional capacity reservationNew 11
  12. 12. EC2 Spot Pricing Users with urgent computing needs or large amounts of additional capacity Time or instance flexible Experiment and/or build cost-sensitive businesses 12
  13. 13. Spot Instance Details 90% savings!* Options ▪ Spot fleet to maintain instance availability ▪ Spot block durations (1-6 hours) for workloads that must run continuously Commitment level ▪ None * Compared to On-Demand price based on specific EC2 instance type, region, and Availability Zone 13
  14. 14. Spot Rules Markets where the price of compute changes based on supply and demand You’ll never pay more than your bid 50% bid of OD 75% bid of OD 25% bid of OD You pay the market price 85% discount! 14
  15. 15. Spot Advisor 15
  16. 16. Have a balanced meal! Why choose just one business model?
  17. 17. Agenda Amazon EC2 Spot Instances and Cloud Compute Snapshot of IDC Study Results Customer Highlights from IDC Study Business benefits of Amazon EC2 Spot Instances
  18. 18. IDC Methodology and Research Process ▪ IDC conducted seven in-depth interviews with organizations using Amazon EC2 Spot Instances ▪ Interviews covered quantitative and qualitative topics focused on “before” and “after” these organizations’ use of Amazon Spot Instances, and the value of Spot Instances ▪ IDC used data from interviews to create a model, representing an average of these organizations’ experiences with Spot Instances ▪ Model informed Business Value analysis ▪ Published white paper in February 2017 ▪ Deliverables include: Executive Summary, Business Value Snapshot, Situation Overview, the Business Value of Amazon EC2 Spot Instances, Challenges/Opportunities 18
  19. 19. The Business Value of Spot Instances Flexible and scalable compute at a much lower cost 19
  20. 20. Average Annual Benefits, EC2 Spot Instances Cost savings that create opportunities for business enablement 20 Value Proposition of Amazon EC2 Spot Instances: 1. Cost effective compute 2. IT operational efficiencies Lead to: Business enablement
  21. 21. Value of Cost Effective Compute Leveraging Amazon EC2 Spot Instances to lower the cost of doing business 21 Study participants substantially reduced their compute costs (64%) on average, and are able to grow with reduced cost constraints in terms of compute. From the AWS customer: “With Spot Instances, we can get the exact same computing capacity at up to 90% discount. . . [it has] given us more bang for our buck without having to change a lot of things.”
  22. 22. More Efficient IT Operations Speeding up development, requiring less time for management 22 Application development teams benefit from minimizing cost considerations in compute provisioning with Spot Instances, speeding up development cycles and increasing scalability. From the AWS customer: “[T]he ultimate value for us [of Spot Instances] is not having to worry about scaling. . . We can release things onto the market and figure it out later [because Spot Instances] make this possible with their cost.”
  23. 23. Business Enablement with Scalable, Cost-Effective Compute 23 True compute scalability Removing compute cost as an IT bottleneck Carry out business differently Ability to pursue new approaches / services Reduce time to market Leveraging on-demand compute capacity Competitive differentiator Lowering the cost of providing services Putting business in a position to better compete
  24. 24. Business Impact of Amazon EC2 Spot Instances Achieving better business results 24 From the AWS customer: “Spot Instances basically allow for much faster experimentation by our customers allowing for POCs to go quicker. Also, our ability to provide Spot Instances is a differentiator in the marketplace. . . And this helps us earn millions of dollars of additional revenue each year.”
  25. 25. Agenda Amazon EC2 Spot Instances and Cloud Compute Snapshot of IDC Study Results Customer Highlights from IDC Study Business benefits of Amazon EC2 Spot Instances
  26. 26. Customer Feedback about Amazon EC2 Spot Instances ▪ What-if scenarios lead to better market analysis ▪ Amazon EC2 Spot Instances suggest best practices that make applications inherently fault tolerant ▪ Workloads are usually stateless and/or non- urgent ▪ New applications are built with an Amazon EC2 Spot option ▪ Accelerated testing leads to faster time to market 26
  27. 27. 27
  28. 28. Running Amazon EC2 Spot Instances at scale 34 ▪ Processing 3.7 billion GPS probes (150 million miles) every day ▪ API serving 30k requests per second ▪ 55k active developers on the Mapbox platform ▪ Reaching 250 million unique users
  29. 29. Amazon EC2 Spot strategies 35 ▪ Use best practices ▪ Interruption tolerance ▪ Statelessness ▪ Fast cold start ▪ Diversify across instance types ▪ SpotFleet ▪ ECS
  30. 30. Results 36 ▪ Consumption of compute hours has increased by 1044% since last year ▪ COGS decreased / margins increased ▪ Average monthly compute costs reduced by 80-90%
  31. 31. Questions Matthew Marden Research Manager, Business Value Strategy Practice  mmarden@idc.com Larry Carvalho Research Manager, Cloud Platform and Developer Services  carvalho@idc.com @robustcloud Joshua Burgin General Manager – Amazon EC2 Spot Instances Amazon Web Services Will White VP Platform Mapbox
  32. 32. Thank you!

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