This document outlines Nathan Besh's presentation on cost optimization. It discusses using a well-architected approach including governance, pricing models, resource sizing, and cost monitoring. Governance involves controlling access through IAM policies and budgets. Pricing models compares on-demand, reserved, and spot instances. Resource sizing looks at right-sizing through CloudWatch and Trusted Advisor. Cost monitoring utilizes services like Cost Explorer, RI reports, billing reports, and Athena for analysis.

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Nathan Besh
Cost Lead, Well-Architected
Cost Optimisation
Instructor Led Lab
natbesh@amazon.com

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Today
• It’s 101 Focused
• I Assume Very Little Knowledge/Experience
• Mix of Information and Exercises
• If You’re Advanced = Train the Trainer
• No Coding or External Tools/Programs
• Everything Must be a few Clicks in the Console
• You can use your own account (need IAMCreate permission)

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Zero to Hero (your type of hero)
• Tools and Knowledge to Gather Information
• Present it with Business and Financial Meaning
• Feedback - 5 Stars Rating?
• Send me Your Savings = Bill in 1 Month, Bill in 3 Months

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Cost of Optimisation
• Cost of Collection, Analysis, Implementation
• You MUST Invest in Time and $ (wisely)
• Short, Fast Cycles of Cost Management
• Look for High Spend & High Return
• Top 10’s

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Well-Architected Approach

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Well-Architected Approach
• Governance
• Pricing Models
• Resource Sizing
• Monitoring Cost and Usage

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Governance

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Governance: Control Who Can do What
Provide and Control Access
• IAM Policies
• Users
• Groups
• (Limits)

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Exercise #1
Policies, Users and Groups

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Exercise #2
Policies – Access Restriction

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Governance: Inform - Alerts
Alert for Anomalies
Alternative to Policies/Restrictions
AWS Budgets
• Set actual & forecasted budgets
• Track cost, usage & RI utilisation
• Alert when forecasted or actuals exceed pre-defined limits
• Refine by Accounts, Tags, Instances… <~10 billing columns>

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Governance: CloudWatch Billing Alert
Prefer not to use this…
• Creates an SNS Topic
• Requires additional access
• More Management/Operational Cost

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Exercise #3
Budgets - Alerts

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Governance: AWS Budgets
Usage budget
• Good alternative for limits (notify, don’t restrict)
• Specify Service, Instance Type and Usage Type (10 billing
columns)
RI Budget
• Uses % by hrs, not $ or absolute hrs
• Track forecasted utilisation of high value RI’s
• What % should I use?

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Pricing Models

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Pricing Models
• On Demand
• Reserved Capacity/Instances
• Spot
• Region Cost

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Pricing Models: Reserved & Loss Aversion
• People Prefer to Avoid Losses rather than Acquiring the
Equivalent Win
• What is the Actual Cost of Getting it Wrong?
• Average 18.54 concurrent instances: Cost: $8,060.788
• How Wrong can I go & Still Win?
• 25.99 PUF RI’s
• 26.52 FUF RI’s

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Pricing Models: Reserved – Assess Risk
Break Even
100
%
Fully Paid
Assume 70%
Fully Paid DayRI Utilisation

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Pricing Models: Which Model?
NUF vs PUF vs
FUF
*Prices as at 24th Apr 2018
- Standard vs Convertible

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Exercise #4
Pricing Models – RI Report

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Pricing Models: RI Report
• Purchase the Lower Size When Flexible
• Decide at Speed and Scale
• Max/Min – What’s the spread?
• Average – Close to Max? Close to Min?
• Sort by Break Even (sooner = lower risk)
• Then Sort by Monthly Savings (highest return)

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Pricing Models: RI Reports – Change in Usage

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Exercise #5
Pricing Models – RI Report (Pt2)

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Resource Sizing

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Resource Sizing: Requirements
• Utilise Key Instance Attributes
• CPU
• Memory
• Network
• Additional Metrics: Storage (usage & size)
• Customised/DIY Solutions:
https://docs.aws.amazon.com/AWSEC2/latest/UserGuide/mon-scripts.html
• Enterprise/Company Wide Solution Aligned

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Exercise #6
Resource Sizing – CloudWatch
Dashboards

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Resource Sizing: Trusted Advisor
• Requires Business Support ($100/month min, % of bill)
• Currently ~60 checks per account
• Multiple Services Supported (RDS, Redshift)
• Does NOT Check Memory
• 5 categories:
• Cost
• Performance
• Security
• Fault Tolerance
• Service Limits

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Exercise #7
Resource Sizing – Trusted Advisor

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Monitor Cost

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Monitor Cost
• Monitor Your Usage as You Would System Uptime
• Audience, Tooling will Vary
• Higher Level = Cost Explorer
• Lower Level = Cost and Usage Reports

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Exercise #8
Monitor Cost – Cost Explorer

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Monitor Cost: RI Utilisation
• Shows “Hours”, not Cost (t2.micro vs ds2.8xl hours?)
• Need $ - spreadsheet vlookup/conversion
• T, M, C Families: Large = x$0.1, xlarge = x$0.2, 2xl = x$0.4….
• P, G, X, R, I, H, D Families: Add additional multiplier
• Set Utilization Target = Fully Paid Day (100% = unnecessary concerns)

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Monitor Cost: RI Utilisation
Fully Paid Day – Rough Estimates
Discount Level:
T2’s = 41%
M5’s = 39%
M4’s = 41%
C5’s = 39%
G3’s = 35%
F1’s = 36%
X1’s = 41%
R4’s = 40%
I3’s = 35%
H1’s = 35%
D2’s = 50%
P2’s = 35%
T2, M5, C5, M4, X1, R4 = 40% Discount
G3, F1, I3, H1, P2 = 35% Discount
D2 = 50% Discount
T2, M5, C5, M4, X1, R4 = 60% Utilisation
G3, F1, I3, H1, P2 = 65% Utilisation
D2 = 50% Utilisation

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Monitor Cost
With Depth

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Monitor Cost: Billing Reports
• Detailed! (Up to Billions of Lines)
• Data Source for Many 3rd Party Tools
• Hourly Granularity
• Everything, Everyone, Anytime, Anywhere = 1 File

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Exercise #9
Monitor Cost – Billing Reports

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Monitor Cost: Billing Report Analysis
• Scalable (Over a Billion Lines)
• Repeatable – Columns Change (Especially Tags)
• Low Maintenance (Serverless)
• Familiar/Popular Access Method (ANSI SQL)
• Athena & AWS Glue

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Exercise #10
Monitor Cost – AWS Glue & Athena

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Monitor Cost: SQL
• SQL – Structured Query Language, databases
• Athena = ANSI SQL (standards based, lots of doco)
• Basic structure:
Select <column name>, <column name> from table
Were <condition>
Group by <column name>
Order by <column name> [asc | desc]
Limit <rows>

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Monitor Cost: Using Athena
• Everything is “string”, must use cast to convert for
operations.
lineitem/unblendedcost = “string”, should be “double”
sum(lineitem/unblendedcost) = error
sum(cast("lineitem/unblendedcost" AS DOUBLE)) as cost

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Exercise #11
Monitor Cost – Queries

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Cost Lead, Well-Architected
natbesh@amazon.com
Nathan Besh

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Please complete the session survey in
the Summit App.
(and send me some bills!)

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Thankyou