Cloud Expedition Technical1 - Día 1.pptx

© 2023, Amazon Web Services, Inc. or its affiliates.
AWS PartnerCast:
Cloud Expedition 2023
Cost management and optimization on AWS
Alfonso Barbosa
Partner Solutions Architect

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June 23
June 30
July 7
July 21
July 14
Cost management and optimization on AWS
Keep your AWS account and workloads secure
CloudEndure to AWS Elastic Disaster Recovery
Unlocking the Power of AWS Modern Applications with EKS
Migrations strategies for Moving to AWS
Were we are ?

On this session
Concepts
70min
Demo
30min
Knowledge
Check

Cost management and
optimization on AWS

During this session
• Challenges and AWS approach
• Cost optimization principles
• Customer journey
• Demo

Challenges
and how AWS approaches them

Customer Challenges
“Why is my AWS bill so high? I thought I should be spending less in the cloud.”
“How can I reduce AWS costs for Dev/QA environments?”
“What options do I have to bring down my AWS cost?”

AWS Approach
• AWS works relentlessly to reduce our own costs and
has passed the resulting savings to customers 111+
times through price reductions
• Provided Tools: Trusted Advisor, Cost Explorer,
Compute Optimizer, Spot Advisor, Well-Architected
Cost Labs, etc.

Cost
Management
The ability to give visibility of costs to keep
them under control and to enable cost
optimization
Cost
Optimization
The ability to run systems to deliver business
value at the lowest possible price point.

AWS Cloud Financial Management
Plan Run See Save

Tags
You can use tags to organize your resources, and cost allocation tags to track your AWS costs
on a detailed level.
Uses Key: Value Pair
Cost Allocation Tags
Two Types:
• AWS-Generated Tags
• User-Defined Tags
Report Against Tags using:
• Cost and Usage Report
• Cost Explorer
Common Tagging Categories
Technical Tags Business Use
Automation Security

Cost Per Tenant with Tags
Prod
Test
Dev
DynamoDB Table
Aurora Instance
EC2 Instance
Dev
Resource Environment Cost
EC2 Dev $64.54
Aurora Prod $192.85
Dynamo Test $51.14
Dedicated resources can be
tagged per tenant

AWS Cost & Usage Report (CUR)
D I V E D E E P E R I N T O C O S T A N D U S A G E W I T H T H E M O S T C O M P R E H E N S I V E A N D G R A N U L A R D A T A
A V A I L A B L E .
Most detailed and granular view of cost and
usage
Delivered multiple times a day
Build custom queries and reports

Comprehensive dashboards
Automated trend analysis
Friendly user experience and programmatic
access
AWS Cost Explorer
A N D F I L T E R D A T A T O E S T A B L I S H A U N I F O R M V I E W O F Y O U R C O S T
V I E W T O P C O S T T R E N D S A N D G R O U P
A N D U S A G E .

Cloud Intelligence Dashboards
A series of in-depth and customizable dashboards which provide the most comprehensive cost and usage
details to help you optimize cost, track usage goals, and achieve operational excellence.
Easy to use
Secure
Cost Efficient
In Depth

Cost Intelligence Dashboard
Great for finance and executives.
Track unit cost and past savings.
Strategize for purchasing Savings
Plans and Spot Instances.
https://d1s0yx3p3y3rah.cloudfront.net/anonymous-embed?dashboard=cid

What does good look like?
Time
Costs
Usage
Going from paying for what you use… To paying for what you need.
Time
Costs
Usage

Pillars of cost optimization

The Five Pillars of Cost Optimization
Rightsize your
resources
Pick the right
pricing model
Increase
elasticity
Optimize
storage
Measure,
monitor and
improve
Laying the Foundation: Setting Up Your
Environment for Cost Optimization

Pillar 1:
Rightsizing
Cheapest resource type / Best Performance
Monitor Usage

87.5%
Saving
Rightsizing example
m5.4xlarge
$0.768 per hr m5.large
$0.096 per hr
2. Check (CPU, RAM,
network, disc)
1. Migrate/provision &
Run
3. Rightsize
5. Save!
4. Review Performance
Right Sizing: Provisioning Instances to
Match Workloads

Cost Explorer – EC2 Rightsizing Recommendations
• View recommendations across all linked
accounts
• Identify:
• Optimization opportunities
• Estimated monthly savings
• Estimated savings (%)
• Filter recommendations (e.g. - by region,
by tag)
• Enhanced by enabling custom memory
metrics
• Results exportable via CSV

Compute Optimizer recommendations: cost vs performance
https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/ec2-instance-recommendations.html

Compute Optimizer Dashboard
Great for DevOps and IT managers.
Discover potential savings from
right-sizing.
Generate reports with
recommendations for individual
resources.
https://d1s0yx3p3y3rah.cloudfront.net/anonymous-embed?dashboard=compute-optimizer-dashboard

AWS Trusted Advisor – Cost Optimization checks
• Underutilized resources
• Idle resources
• RI Recommendations

TAO Dashboard
Great for DevOps and IT managers.
See org-wide Trusted Advisor flags
over time.
Find and take action on underutilized
resources, security and other issues
quickly.
https://d1s0yx3p3y3rah.cloudfront.net/anonymous-embed?dashboard=tao

Pillar 2:
Increase Elasticity
Autoscaling

Traditional approaches to capacity management
Build to peak load Build to average load

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!
AWS Well-Architected Framework Concepts: Elasticity

Pillar 3:
Leveraging the Right
Pricing Model
Reserved Instances / Savings Plans
EC2 Spot
On-Demand

Reserved Instances and Savings Plans
• Billing subscription (“discount coupon” that’s applied hourly)
• Commitment for 1yr or 3yr term
• Payment options: All/Partial/No Upfront
• By default discount is shared between all accounts in AWS
Organizations family
• In AWS Organizations account that purchased RI or SP
benefits from the discount first
• Amazon EC2: both RIs and SPs offer same* discount for same
usage types
Reserved
Instances
(RIs)
Savings
Plans (SPs)
* Exception: SUSE platform. RIs offer greater discount for SUSE instances compared to SPs

Basic Overview of Purchasing and Using RIs
1. Purchase RI
that matches
T2 instance
$$$ On-Demand rate
3. Launch C4
instance that
matches C4 RI
$$ Discounted rate
applies automatically
2. Purchase RI
for a C4
instance
$$ Discounted rate
Paying for RI
$$ Discounted rate
$$ Discounted rate
The following diagram shows a basic overview of purchasing and using Reserved Instances.

Which EC2 RIs give greater discount?
Greater discount
Less discount
All upfront
Partial upfront
No-upfront
Payment option
3 year
1 year
Duration
Linux/UNIX
Licensed OS
Operating System
Newer gen.
Older generations
Instance type
Standard
Convertible
Type

Other Services Reservations
RDS Redshift ElastiCache Opensearch DynamoDB
Term 1yr and 3yr 1yr and 3yr 1yr and 3yr 1yr and 3yr 1yr and 3yr
Average Discounts 30%-60% 20%-75% 42%-56% 31%-52% 50%-70%
Size-flexibility Yes* - - - -
• Billing subscription only
• No capacity reservation, and cannot be modified/exchanged
• Similar to EC2, discounted rate applies automatically when attributes of
running instance/node match attributes of RI
* MySQL, MariaDB, PostgreSQL, Amazon Aurora and BYOL Oracle DB (single- or multi-AZ)

RI Purchase Recommendations – Cost Explorer

What is a Savings Plan?
• What is a
Savings Plan?
• A flexible pricing model
that helps to save up to
72% on compute usage.
How does it
work?
Simply commit to an hourly spend
rate for discounted compute usage
to receive set rates!

Savings Based on Hourly Monetary Commitment
Commitment of $ 10.00 per
hour for qualified usage
On-Demand
Rate
Savings Plan
Rate
Note: The hourly commitment is valid for the
duration of the plan term

General Benefits of Savings Plans
Easy to use
• Receive Automatic
discounts in exchange
for monetary
commitment
Significant discount
Up to 7 2 % discount on
EC2, 6 6 % on Fargate,
1 7 % on Lambda and
6 4 % on SageMaker
spend.
Flexible
A single commitment
that applies across
multiple usage types

Savings Plans Dashboard

RI & SP Pricing Models – Flexibility & Discounts
Zonal Standard RI
Regional Standard RI
(AZ flex, size-flex)
Zonal/Regional Convertible RI
(AZ, Size, Family, OS, Tenancy)
Instance Saving Plan
(AZ, size, OS, Tenancy)
Compute Saving Plan
(AZ, size, Family, OS, Tenancy, Region, Service)
Highest Discount
Up to 72%
High Discount
Up to 66%
RIs
SPs
Flexibility

Services that Benefit from the Discount
• Commit to an hourly spend rate
• Recommended for EC2 if first time
buyer, or upon expiration of previous
RIs
Reserved Instances Savings Plans
Amazon EC2 Amazon EC2
Amazon RDS
Amazon ElastiCache Amazon DynamoDB AWS Elemental
MediaConvert
Amazon Opensearch
Service
Amazon Redshift
Non-EC2 reservations:
• Billing discount only (no capacity reservation)
• Region Specific, no exchange and modification options
• Most* RDS platform are size-flexible
• Apply to accounts within AWS Organizations in a same way
*MySQL, MariaDB, PostgreSQL, Amazon Aurora and Oracle BYOL
AWS Fargate AWS Lambda Amazon SageMaker
• Flexible pricing model

Spot can be used for
Stateless
Fault-tolerant
Big data
Containers
CI/CD
Web servers
High Performance Compute
Dev/Test
See https://amzn.to/2wKNIT1
EC2 Spot provides incredible savings for the right workloads
Up to 90%
Savings

Pillar 4:
Leveraging the right
storage class
Elastic Block Storage (EBS)
Simple Storage Service (S3)

Amazon Storage Classes/Platforms
Data Transfer
• Server/Instance Storage
• Local Filesystems
• Network Volumes (EBS)
• Object Storage
• Backup Target –
Snapshots,…
• Distributed
Filesystem
Amazon Elastic File
System
Object
Amazon Simple Storage
Service
Amazon S3 Glacier
EC2 Instance Store
File
Amazon Elastic Block
Store
Block
AWS Direct Connect AWS Storage Gateway
AWS Snowball
How do you select your storage
solution?

Pillar 5:
Mechanisms for cost
optimization

Summary of Mechanisms for Optimization
Define, agree, and enforce
cost allocation tagging
Assign optimization
responsibility
Define metrics, set
targets, and review
Enable teams to
architect for cost

Customer journey
in cost optimization

Customer journey
Customer Lifecycle Stages
• Investigation and Design
• Implementation and Testing
• Production and Growth
• Operational
Cost
Time
Costs will typically increase over time
At each stage different cost optimization strategies are appropriate

Customer journey – Investigation and design
Cost
Time
• Provide case studies
• Consider alternative support
• Consider cost along with
functionality
• Best practices
• Review Account Structure
• Implement Tagging
Architecture will have a big impact on eventual cost to operate

Customer journey – Implementation and testing
• Monitor costs
• Review budgets
• Review architectural decisions
• Leverage elasticity
• Review storage choices
• Add additional tagging
Cost
Time
Costs tend to increase significantly during this stage.

Customer journey – Production and growth
• Review cost optimization
recommendations
• Review account usage
• Monitor resource utilization
• Consider automation
• Review chargeback/reporting
Cost
Time
Ongoing costs become clear during this stage
Increasing adoption drives further cost increases

Customer journey – Operational
At this stage we can apply all of our cost optimization pillars:
• Provide regular reports and recommendations
• Optimize account usage
• Remove/Right-size resources
• Increase elasticity
• Review storage types
• Review backup/archive strategy
• Purchase SPs/RIs
Cost
Time

Customer journey – Pillars of optimization
Cost
Time
Design
Growth
Implementation
Operational
Right Size &
Decommission
unused
Resources
Increase
Elasticity
Use Savings Plans/Reserved
Instances
Match Storage
to Need
Design for
Cost

How you can get started on this journey
How many
instances
could I
right-size?
What benefits
could I get
from Reserved
Instances and
Savings Plans?
How many
instances are
configured for
auto-scaling?
How many of
my instances
need to be
running 24x7?
Check out: Cost Optimization Pillar - AWS Well-Architected Framework

Knowledge Check

Customer journey – Quiz
1. Right Size &
Decommission unused
Resources
3. Use Reserved
Instances or Savings
Plans
2. Increase Elasticity 4. Match Storage
to Need
5. Design for
Cost
A customer has been using AWS to host a web application for several years.
Which cost optimisation pillars are likely to yield savings quickly?

Customer journey – Quiz answer
1. Right Size &
Decommission unused
Resources
3. Use Reserved
Plans
to Need
5. Design for
Cost
A customer has been using AWS to host a web application for several years.
Which cost optimisation pillars are likely to yield savings quickly?
A: Right-Sizing/Decommissioning and using Reserved Instances.

Customer journey – Quiz
1. Right Size &
Decommission unused
Resources
3. Use Reserved
Plans
to Need
5. Design for
Cost
A customer is planning to migrate a workload from a legacy on-prem
implementation to AWS. They are just starting their cloud journey and are
worried about cost. What pillars can we use to advise them?

Customer journey – Quiz answer
1. Right Size &
Decommission unused
Resources
3. Use Reserved
Plans
to Need
5. Design for
Cost
A customer is planning to migrate a workload from a legacy on-prem
implementation to AWS. They are just starting their cloud journey and are
worried about cost. What pillars can we use to advise them?
A: All of them! Planning ahead is critical to ensure future efficiencies.

DEMO
60

Thank you!
Alfonso Barbosa
abarbosa@amazon.com
Cost Management
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Cloud Expedition Technical1 - Día 1.pptx

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