Learn how to seamlessly combine Amazon EC2 On-Demand, Spot, and Reserved Instances to optimize cost, scale, and performance. Understand best practices used by customers all over the world for the most commonly used applications and workloads. Discover multiple ways to grow your compute capacity, and enable new types of cloud computing applications, without it costing a lot of money.

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Boyd McGeachie
Sr. Product Manager
EC2 Pricing & Launch Services
SRV203
Optimizing Amazon EC2
For Fun and Profit

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Optimizing Performance and Cost
Right-Sizing
Purchasing Options
Increase Elasticity
Measure, Monitor
& Improve

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Right-Sizing
• Selecting the cheapest instance available while
meeting performance requirements
• Look at CPU, RAM, storage, and network
utilization to identify potential instances that can
be downsized
• Testing with On-Demand is cheap (use Spot to
test even cheaper!)

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Amazon EC2 Instance Growth – Increased Choice
2017 launches:
• Compute optimized: C5, M5
• General purpose: T2 Unlimited
• Accelerated computing: G3, P3
• Memory optimized: x1e
• I/O optimized: I3, H1
• Programmable/FPGAs: F1
• Bare metal: I3.metal (Preview)
3
5
7
11 12 13
23
42
52
60
70
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Increase Elasticity
Turn off non-production instances
• Look for dev/test, non-prod instances that are
always running and turn off
Automatically scale production
• Use Auto Scaling to scale in and out based on
demand and usage
• AWS CloudFormation, Amazon CloudWatch, &
scheduled scaling are your friends

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Measure, Monitor, Improve
• Auto-tag resources
• Identify always-on non-prod
• Identify instances to downsize
• Recommend Reserved Instances
• Dashboard your status
• Report on savings

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Tagging Is Essential
•How do we explain the costs?
•How do we allocate the charges to the
right team?
•How do we save money?

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Tagging Is Essential
Up to 10 tags (key-value pairs) per instance
• Completely custom – environment, owner, application, cost center, etc.
• Tag on create, after launch, or both!
i-4a1c2f5d
Owner =
Admin
Env =
Test
App =
website
i-4a3d3f6e
Owner =
Admin
Env =
Prod
App =
website

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Templatize Launch Requests with EC2 Launch Templates

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Consistent
Experience
Simplified
Permissions
Governance &
Best Practices
Increase Productivity
Launch Templates are now available in AWS CloudFormation
with Auto Scaling and Spot Fleet
Use Launch Templates to Achieve …

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Amazon EC2 Purchasing Options

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No upfront
investment
required
Pay as you go
Pay less when you
reserve
Pay less as AWS
grows
AWS Pricing Principles

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Amazon EC2 Purchasing Options
On-Demand
Pay for compute capacity by the second
with no long-term commitments
Spiky workloads,
to define needs
Reserved Instances
Make a 1- or 3-year commitment and
receive a significant discount off On-
Demand prices
Committed &
steady-state usage
Spot Instances
Spare EC2 capacity at savings of up to
90% off On-Demand prices
Fault-tolerant, flexible,
stateless workloads

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Amazon EC2 On-Demand Pricing
Short-term, spiky, or
unpredictable
Low-cost & flexible Develop and test

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Amazon EC2 Reserved Pricing
Discount up to 75% off
the On-Demand price
Steady state and
committed usage
1- and 3-year terms

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EC2 Reserved Pricing – Flexibility & Savings
Optional Capacity
Reservation when used in a
specific Availability Zone
Convertible RIs
Change instance family, OS,
tenancy, & payment
Payment Flexibility
with three upfront payment
options (all, partial, none)

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Reserved Instance Recommendations

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Reserved Instance Recommendations

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Reserved Instance Recommendations

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Reserved Instance Recommendations
Go to the Cost Explorer in the AWS console and select
Recommendations from the navigation menu

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Amazon EC2 Spot Instances
Low Cost Faster Results Easy Access Resource
Flexibility
Spare EC2 capacity that AWS can reclaim with two minutes of notice

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Rendered on Amazon EC2 Spot Instances

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EC2 Spot: Spare Compute Capacity at Scale
Spot is available for all EC2
instance types, in all public
Regions and in all Availability
Zones
Coming soon – AWS GovCloud (US)!

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Consumer Apps & Services
B2B Enterprise Tech
Research
Sports, Media &
Entertainment Financial Services
AdTech & Digital Experience

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EC2 Spot: Use Cases
Big Data
Containers &
Test/Dev
HPC & Batch Web Services
FINRA has saved up to 50%
from its on-premises solution,
increased elasticity/scalability,
and accelerated reprocessing
requests from months to days
with EC2 Spot Instances
Yelp runs millions of tests
every day with EC2 Spot
Instances. Yelp improved test
result response time from 2
days to 30 minutes and has
also delivered a large reduction
in execution costs with Spot.
TLG Aerospace saw a 75%
reduction in the cost per CFD
simulation with Amazon EC2
Spot Instances. They were able
to pass those savings along to
their customers and be more
competitive.
AdRoll have been able to
seamlessly scale their
infrastructure, better serve
customers across the globe,
and reduce our fixed costs by
75% and operational costs by
83%.with AWS solution,
including EC2 Spot Instances

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New EC2 Spot Pricing Model
Simplified Access
Via existing EC2 API calls such
as RunInstances
Simplified Pricing Set it
& Forget it
Low predictable prices
without bidding
Pause & Resume
With hibernation and stop-
start
Simplified access model, predictable prices, pause & resume
Spot Fleet: Simply tell Spot Fleet how much capacity you need and Fleet does the rest

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New Spot Instance Advisor
✓ Shows your savings over
On-Demand
✓ Helps you select pools
with the least chance of
interruption
Note: The average frequency of interruption across all Regions and instance types is <5%
https://aws.amazon.com/ec2/spot/instance-advisor/

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Picking the Right EC2 Purchase Option

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To Optimize EC2, Combine All Three Options
1. Use Reserved Instances for
known/steady-state workloads
2. Scale using Spot, On-Demand, or
both
3. AWS services make this easy and
efficient (e.g., Auto Scaling, Spot
Fleet, ECS/EKS, Amazon EMR,
Thinkbox Deadline, AWS Batch,
AWS CloudFormation)
0
2
4
6
8
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
On-Demand
Spot
Reserved

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EC2 Fleet provisions across different EC2 instance
types and purchase models
Fast Access to
Capacity
Optimize Price &
Availability
Customize Based on
Application

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Optimization Patterns by Application

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Optimization Patterns – Web Application

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Web Tier – Stateless, Scale with Usage Growth
0
50
100
150
200
250
300
350
400
0 2 4 6 8 10 12 2 4 6 8 10
Web traffic
0
5
10
15
20
25
30
35
40
0 2 4 6 8 10 12 2 4 6 8 10
Web servers
Reserved On-Demand Spot

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App Tier – Stateful, Scale with Usage Growth
0
10
20
30
40
50
0 2 4 6 8 10 12 2 4 6 8 10
App servers
Reserved On-Demand Spot block
0
100
200
300
400
500
0 2 4 6 8 10 12 2 4 6 8 10
App requests

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Database Tier – Stateful, Static at Peak Load
0
100
200
300
400
500
600
700
800
900
0 2 4 6 8 10 12 2 4 6 8 10
Database requests
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0 2 4 6 8 10 12 2 4 6 8 10
Database servers
Reserved On Demand Spot

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Optimization Summary: Three-Tier Web App
0
10
20
30
40
50
60
70
80
90
0 2 4 6 8 10 12 2 4 6 8 10
Three-tier application servers
Reserved On-Demand Spot
Summary
You don’t pick just one! Across the three tiers,
our combined approach consists of:
• Spot 13%
• On-Demand 11%
• Reserved 76%
“No server is easier to manage than no server.”
- Werner Vogels, CTO, Amazon.com
“

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Optimization Patterns – Grid Processing

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The Old Way – Low Utilization, High Costs
Server utilization rates are typically low due to need to deploy in advance and for peak needs

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The Old Way – Managing with High Utilization
Higher grid utilization rates result in hidden costs: longer queue wait times and delayed results

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The Old Way – in the Cloud?
0
20
40
60
80
100
120
140
160
3 year Reserved Instances
?

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The Old Way – Conflicting Goals
-600%
-500%
-400%
-300%
-200%
-100%
0%
100%
0
200
400
600
800
1000
1200
1400
Jobs in the Queue
Grid Utilization
Higher utilization can reduce IT spending… but also constrain the business
But every job in the queue
represents business impact
Grid Utilization looks great

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The Cloud Way: Scalability When Needed
Scale higher to reduce time to results: Less waiting, more agility, faster innovation

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The Cloud Way: Optimize for Cost and Results
?
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
3 year Reserved Instances On-Demand Spot

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The New Way: Accelerating Transformation
Founded: 1996 • Employees: 15,000+ • Headquarters: Brisbane, Australia
“We constantly understate what our capabilities are to solve problems. The biggest
constraint is never the constraint of time or money, it’s generally the constraint of
thought.”
– Jeff Smith, CEO, Suncorp Business Services

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Optimization Patterns by Industry

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Optimization Patterns – Ad Tech (Web Scale)

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Optimization Patterns – Enterprise SaaS

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Optimization Patterns – Gaming

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Optimization Patterns – Onboarding Enterprise

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Optimization Patterns – Scientific Research

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Optimization Patterns – Multi-National Corp.

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Optimization Patterns – Across the Organization
Data science
New app development Test and development
Internal IT

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Summary

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Optimization Best Practices
✓ Remember the pillars of optimization
✓ Right-sizing
✓ Increase elasticity (turn stuff off!)
✓ Measure, monitor, and improve
✓ Use Launch Templates to streamline and simplify
the launch process
✓ Use tags to understand your services
✓ Architect your workloads with performance and
cost in mind
✓ Optimize across the three purchasing options

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Putting It All Together
Build Free From
Constraints
Optimize Cost and
Performance
Accelerate Your
Innovation
By combining the breadth of the EC2 three purchase options with the depth
of the capabilities our platform provides, you will …
On AWS, you can be more innovative and more cost-effective than anywhere else

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