In this session, learn how to seamlessly combine Amazon EC2 On-Demand, Spot, and Reserved Instances to optimize cost, scale, and performance. Hear about the best practices used by customers all over the world for the most commonly used applications and workloads. Finally, discover multiple ways to grow your compute capacity and enable new types of cloud computing applications without spending much money.

1. © 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved.
Madhuri Peri
Sr. EC2 Spot Specialist Solution Architect
Optimize EC2 for Fun and Profit
SRV203

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Right-sizing Amazon EC2
purchasing options
Increase elasticity Measure, monitor,
improve
Pillars of optimization

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Right-sizing
• Select 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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3
5
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11 12 13
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42
52
60
70
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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
2018 launches:
• Memory Optimized - R5, R5dz1d
Amazon EC2 instance growth – increased choice

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T2 Unlimited – power on and go!
Cost-effective for most
general-purpose
workloads
Generous baseline
performance, automatically
burst to full-core
Now burst whenever you
want, for as long as you
want

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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
i-4a1c2f5d
Owner =
Admin
Env =
Test
App =
Web Site
i-4a3d3f6e
Owner =
Admin
Env =
Prod
App =
Web Site
Up to 50 tags (key-value pairs) per instance
• Completely custom – environment, owner, application, cost center, etc.
• Tag on create, after launch, or both!

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Amazon EC2 Purchasing Options

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No upfront
investment
Pay as you go Pay less when
you reserve
Pay less as AWS
grows
AWS pricing principles

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

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Amazon EC2 On-Demand pricing
Short-term, spiky and/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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Amazon EC2 Reserved pricing – flexibility & savings
Payment Flexibility
with 3 upfront payment
options (all, partial, none)
Optional Capacity
reservation when
used in a specific
Availability Zone
Convertible RIs
Change instance family, OS,
tenancy & payment
1-year convertible RIs

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Amazon EC2 Spot pricing
Turbo-boost your results
Spare Amazon EC2
capacity that AWS can
reclaim with 2 minute’s
notice
Savings up to 90% off the
On-Demand price

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Amazon EC2 Spot
Urgent computing needs or
large amounts of additional
capacity
Instance or time flexible
Experiment and/or build
cost-sensitive businesses

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Amazon EC2 Spot – predictable prices, pause & resume
Low, predictable
prices
Eliminate the bid! No need to learn new
APIs
Pause & resume with
Stop/Start & Hibernate

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Amazon EC2 Spot – accelerating your innovation

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Picking the right Amazon EC2 purchasing option
You can’t pick just one!

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To optimize Amazon 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,
Amazon ECS, Amazon EMR, Thinkbox
Deadline, AWS Batch) 0
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On-Demand
Spot
Reserved

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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
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Web servers
Reserved Spot On-Demand
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0 2 4 6 8 10 12 2 4 6 8 10
Web traffic

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App tier – stateful, scale with usage growth
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0 2 4 6 8 10 12 2 4 6 8 10
App servers
Reserved On-Demand Spot block
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200
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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
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0 2 4 6 8 10 12 2 4 6 8 10
Database requests
0
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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
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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
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100
120
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160
3 year Reserved Instances
?

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0
200
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800
1000
1200
1400
Jobs in the Queue
Grid Utilization
Higher utilization can reduce IT spending … but also constrain the business
The old way – conflicting goals
Grid utilization looks great
But every job in the queue
represents business impact

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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
?
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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
“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
Founded: 1996 • Employees: 15,000+ • Headquarters: Brisbane, Australia

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Optimization patterns by industry

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Optimization patterns – Adtech (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 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
Get real value from
your data
Accelerate your
Innovation
By combining the breadth of EC2’s 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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