Lowering Costs and Optimizing AWS Spend
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Most likely, your organisation is not in the business of running data centers, yet a significant amount of time and money is spent doing just that. AWS provides a way to acquire and use infrastructure on-demand, so that you pay only for what you consume. This puts more money back into the business, so that you can innovate more, expand faster, and be better-positioned to take advantage of new opportunities. Fabrizio Pappalardo, Partner Manager, AWS
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Lowering Costs and Optimizing AWS Spend
- 1. © 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved. Fabrizio Pappalardo Partner Development Manager, Amazon Web Services pappalf@amazon.it Providing Better Citizen Services at Lower Costs
- 2. Agenda Total Cost of Ownership2. Addressing TCO in AWS3. Taking it further: Cost Optimisation4. The AWS Difference1. Comune di Cagliari: Delivering elections results 5.
- 4. What sets AWS apart? Building and managing cloud since 2006 100+ services to support any cloud workload 18 Regions, 54 Availability Zones, 114 edge locations 65 proactive price reductions to date Tens of Thousands of partners; 4200+ Marketplace products Experience Service Breadth & Depth Global Footprint Pricing Philosophy Community
- 5. Equipment Resources and Administration Contracts Cost No Up Front Expense Pay for what you Use Improve Time to Market & Agility Scale Up and Down Self-Service Infrastructure Traditional Infrastructure Why are organisations choosing AWS? AWS Cloud
- 6. AWS Global Infrastructure 18 Regions – 54 Availability Zones – 114 Edge Locations Region & Number of Availability Zones New Region (coming soon)
- 7. Total Cost of Ownership
- 8. What is TCO? Comparative Total Cost of Ownership analysis (acquisition and operating costs) for running an infrastructure environment end-to-end on-premises vs. AWS.
- 9. Why Use TCO? 1. Comparing the costs of running an entire infrastructure environment or specific workload on-premises or in a co-location facility versus on AWS. 2. Budgeting and building the business case for moving to cloud 3. Paralleling an existing AWS workload with an on premises or co- location setup
- 10. Typical TCO considerations Hardware – Server, Rack Chassis PDUs, ToR Switches (+Maintenance) Software - OS, Virtualization Licenses (+Maintenance) Facilities Cost Hardware – Storage Disks, SAN/FC Switches Software - Backup Network Hardware – LAN Switches, Load Balancer Bandwidth costs Software – Network Monitoring Server Admin, Virtualization Admin, Storage Admin, Network Admin, Support Team 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. Space Power Cooling Project planning, Advisors, Legal, Contractors, Managed Services, Training, Cost of capital Business Value: Cost of delays Risk premium Competitive abilities Governance Etc. IT Labor Costs Network Costs Storage Costs Server Costs 4 1 2 3 Extras5 Facilities Cost Space Power Cooling Facilities Cost Space Power Cooling
- 11. TCO for On-premises v. AWS ≠ Comparing TCO isn’t easy Traditional Data Centre & Co-Location
- 12. What’s missing from a traditional TCO? Economic Criteria Category Infrastructure Comparison Capacity Planning Benefits Financial Benefits of Innovation Cost Avoidance Workforce Productivity Accelerated Time To Value/Market Cost to Achieve (Migration, Platform, Training) Legacy Constraints Included Partially Included Not Included
- 13. On-premises capacity planning Used IT Capacity Idle Capacity 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% On-Premises IT Compute capacityTotal Studies by Gartner, McKinsey and the Uptime Institute have stated that typical data centers are on average less than 50% utilized www.uptimeinstitute.org anthesisgroup.com/wp-content/uploads/2014/08/Data-Center-Issue-Paper-final826.pdf www.nytimes.com/2012/09/23/technology/data-centers-waste-vast-amounts-of-energy-belying-industry-image.html A typical on-premises compute environment is massively underutilized
- 14. Why is on-premises so underutilised? Fluctuating/“Spiky” Part-time Cyclical Peak Peak Peak Part of this can be explained by buying for “peak load” requirements with inflexible infrastructure
- 15. Initial questions to consider when exploring TCO Capacity Planning 1 How do you plan for capacity? How many servers have you added in the past year? Anticipating next year? Can you switch your hardware on and off and only pay for what is used? Utilization 2 What is your average server utilization? How much do you overprovision for peak load? Operations 3 Will you run out of data center space some time in the future? What was your last year power utility bill for the data center(s)? Have you budgeted for both average and peak power requirements? Optimization 4 Are you on AWS today? Are you cost-optimized (Auto Scaling, RIs, Spot, Instances turn on/off)?
- 17. How do customers lower their TCO with AWS? Source: IDC Whitepaper, sponsored by Amazon, “The Business Value of Amazon Web Services Accelerates Over Time.” December 2013 “Customers will have spent 63.4% more on average on-prem or in co-location” Remove over provisioning and move to a “pay for what you use” model Economies of scale allow AWS to continually lower costs Pricing model choice to support variable & stable workloads Save more money as you grow bigger 1 2 3 4
- 18. 1. Lower over-provisioning via “elasticity” Traditional approaches to capacity management:
- 19. 1. Lower over-provisioning via “elasticity” Auto Scaling allows you to: • React dynamically to changes in load • Schedule regular workloads • Optimise your instance usage • Reduce over-provisioning Complimentary service!
- 20. 2: AWS Economies of Scale Reduced Prices More Customers More AWS Usage More Kit Economies of Scale Lower Costs Ecosystem Global Footprint New Features & Services Infrastructure Innovation We pass the savings along to our customers in the form of low prices and continuous reductions (65 reductions to-date) Continually lowering prices for customers is in our DNA
- 21. 3. Pricing models On-demand Reserved Spot
- 22. When to use Reserved Instances?
- 23. 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
- 25. Amazon EC2 Spot Instances Allow you to bid on spare Amazon EC2 computing capacity for up to 90% off the normal on-demand price. Applications that have flexible start and end times Applications that are only feasible at very low compute prices Users with urgent computing needs for large amounts of additional capacity
- 26. With Spot the rules are simple Markets where the price of compute changes based on supply and demand You’ll never pay more than your bid. When the market exceeds your bid you get 2 minutes to wrap up your work
- 27. 4. Save money as you grow 0.024 GB/month 0.023 GB/month 0.022 GB/month First 50 TB per month Next 450 TB per month Over 500 TB per month
- 29. On- Premises Lift & Shift Instance Right-Sizing Improved Elasticity Storage Optimization Optimized Lift and Shift Measure Monitor and Improve Serverless Architecture Managed Services Replatformed, AWS Optimized Traditional TCO Comparisons Modelling Cost Optimisation
- 30. The Five Pillars of Cost Optimization Right-Sizing Your Instances Pick the Right Pricing Model Increase Elasticity Measuring & Monitoring Match usage to storage class
- 31. Right-sizing instances Selecting the cheapest instance available while meeting performance requirements Look at CPU, RAM, storage, and network utilisation 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.)
- 32. Using right-sizing and elasticity to lower cost More smaller instances vs. fewer larger instances 29 m4.large @ $0.12 /hr $2,505.60 / mo* 59 t2.medium @ $0.052/hr $2,208.96 / mo* *Assumes Linux instances in the US-East (N. Virginia) Region at 720 hours per month
- 33. Match usage to storage classes Amazon S3 Designed to store and access any type of data over the Internet Amazon Elastic File System Simple, scalable file storage for use with Amazon EC2 instances in the AWS Cloud Amazon Elastic Block Storage Block-level storage that serves as a virtual hard drive for your Amazon EC2 instance Amazon Glacier Low-cost and highly durable storage service for long-term backup and archive of any type of data AWS Storage Gateway Seamlessly links your on-premises environment to Amazon cloud storage Amazon CloudFront Amazon CloudFront is a global content delivery network (CDN) service
- 34. Serverless architectures No Server Management Flexible Scaling High Availability No Idle Capacity
- 35. Measure, monitor and improve
- 36. Amazon CloudWatch Monitor AWS resources Monitor Custom MetricsSet Alarms View Graphs and Statistics Monitor and React to Resource Changes
- 46. In summary • Cloud is the new normal • Cost containment and control is one of the key attributes of Cloud computing • AWS and Partners offers all the tools needed to optimise your infrastructure costs • Cost optimisation starts with designing the right infrastructure for your specific needs.
- 47. © 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved. Your feedback is important to us! Please complete the session survey in the summit mobile app.
- 48. © 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved. Thank you!
Editor's Notes
- TALKING POINTS Customers have selected AWS for years because AWS has proven its commitment to customer success. We believe we stand apart in the market because of seven factors: Security, Service Breadth and Depth, Experience, Global Footprint, Artificial Intelligence , Partner Community and Enterprise Leadership recognized by Gartner
- So, you probably know what traditional infra look like…servers, routers, all of this equipment that you must provision, manage and secure…. In the Traditional Model – pay for everything up front, nothing is on demand, there are significant long term contracts – you undergo a long planning process to determine what you need, buy that, set up, and hope you’ve planned correctly for the future. There is a lot of internal administration to get this right. With cloud computing, you turn things on as you need or use them and no longer than that. Instead of planning and seeking funding to pay for all of this equipment, you can focus on building apps and services to accomplish your mission, to meet your customer’s needs, on a timely basis…and be able to change when they change….be able to start small, and based on demand, you can scale with your customers….give your developers the tools they need at their fingertips to manage your IT needs and advance your mission. You can move more quickly, be more agile, scale as your business requires, and provide the infrastructure to the people in your org who are building things. In cloud computing, you are giving that capability to the actual engineers to build on your behalf – this is powerful!
- So now, let’s start to see what Aws effectively is.. AWS is this and (next slide) this. But let’s go with order… (come back to this slide) This is our global infrastructure. AWS cloud is present in 18 different geographic regions. All these regions are completely independent and isolated between them, with no dependencies between them in order to get a high level of fault tolerance. In Eu we have Dublin, London, Franckfurt and Paris already active, and Stockholm announced to come late this year. One important thing is that all cloud services are provided in the region you choose to use, so this means that your data are not moved and stay where you want to stay. Each region is made of at least 2 availability zones. Each AZ is a cluster of datacenters, and all AZ in a region are located in a metropolitan area. This means that in a single region you have several physical distint datacenters, distant tens of km from each other, in areas with different risk profiles and interconnected by high speed and low latency links. The wonderful thing is that you can build your own private network spanning on different AZ, so you can architect your applications for HA and BC.
- TCO. This is our most common business driver. It’s arguably the best understood and most quantifiable. It’s the most mature area of Cloud Economics’ practice. We at AWS offer support with tools & resources to help articulate the TCO story.
- TCO. This is our most common business driver. It’s arguably the best understood and most quantifiable. It’s the most mature area of Cloud Economics’ practice. We at AWS offer support with tools & resources to help articulate the TCO story.
- <1 Gartner, McKinsey and others have recently run studies revealing that the typical data center is at BEST 50% utilized…meaning that at least half of the servers in a typical data center are sitting idle. Think about that. That’s an astounding amount of computing capacity doing absolutely nothing. Are you all struggling with this? There are very deliberate reasons behind why this happens. Let’s talk about some of those.
- <1 One of the primary reasons this happens is due to the way applications are architected and the way they behave. Here are some common demand profiles of application computing requirements. You might have workloads that have highly variable or even “spiky” demands (like a web application), you may be running workloads that are only on part-time, or workloads that have cyclical peaks and valleys in their demand. In a typical on-premises built infrastructure, you have to buy, run and maintain server fleets that can meet peak-demand…while sitting idle when demand is off those peaks. Do you really want to continue buying this way indefinitely?
- So with EC2 Spot the rules are actually really simple. Rule 1: The Spot market is where price of compute fluctuations based on supply and demand. Rule 2: You’ll never pay more than your bid, in fact you’ll only ever pay the market price. When the market price exceeds your bid you get 2 minutes to wrap up.
- The initial lift and shift TCO model doesn’t fully capture the on-going Economic case for the cloud. Cost Optimization overtime continues to drive down costs through ongoing improvements, leveraging managed services, expanding the scope of analysis beyond just EC2 (i.e. RDS, lambda, storage, etc.), etc. 6 R’s
- Do not manage the cloud like you would a DC. This is a new operational model. 14% savings from using t2s vs. m4s above.