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.

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. 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. $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. 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. 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. 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. 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. AWS Pricing Principles
Pay as you go
Pay less when you reserve Pay less when AWS grows
No up-front investment
8

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. EC2 On-Demand Pricing
Short-term, spiky and
unpredictable
Low cost and flexible Develop and test
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11. EC2 Reserved Pricing
Upfront payments to
reduce costs
Steady state Optional capacity
reservationNew
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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. 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. 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. Spot Advisor
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16. Have a balanced meal!
Why choose just one business model?

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. 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
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19. The Business Value of Spot Instances
Flexible and scalable compute at a much lower cost
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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. 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. 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. 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. Business Impact of Amazon EC2 Spot Instances
Achieving better business results
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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. 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. 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

34. 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

35. Amazon EC2 Spot strategies
35
▪ Use best practices
▪ Interruption tolerance
▪ Statelessness
▪ Fast cold start
▪ Diversify across instance types
▪ SpotFleet
▪ ECS

36. Results
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▪ Consumption of compute hours has increased by 1044%
since last year
▪ COGS decreased / margins increased
▪ Average monthly compute costs reduced by 80-90%

37. 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

38. Thank you!