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. Common application examples will be used to demonstrate how to best combine EC2’s purchasing models. You will leave the session with best practices you can immediately apply to your application portfolio.

1. © 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Boyd McGeachie
Sr. Product Manager, EC2 Spot
Amazon Web Services
August 14, 2017
Getting the Most Bang for Your Buck
with #EC2 #Winning

2. 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

3. Pillars of performance and cost optimization
EC2 Right
Sizing
Purchasing
options
Increase
elasticity
Measure,
monitor, &
improve

4. EC2 Right Sizing
EC2 Right Sizing
• Selecting the cheapest instance available
while meeting performance requirements
• Looks at CPU, RAM, storage, and network
utilization to identify potential instances that
can be downsized

5. Increase elasticity
Turn off non-production instances
• Look for dev/test, non-prod instances that are
running always-on and turn off
Auto-scale production
• Use Auto Scaling to scale up and down based
on demand and usage (for example, spikes)

6. Measure, monitor, and improve: Uncover the
cost-optimization opportunities
Auto-tag resources
Identify always-on non-prod
Identify instances to downsize
Recommend RIs to purchase
Dashboard our status
Report on savings

7. AWS pricing principles
Pay as you go
Pay less when you reserve Pay less when AWS grows
No up-front investment

8. We completed the equivalent
of 39 years of computational
chemistry in just under 9 hours
for a cost of around $4200.
Steve Litster
Global Head of Scientific Computing, Novartis
”
“
Novartis: Acceleration of pre-clinical R&D
• Existing infrastructure to screen 10
million compounds in a computational
model not available
• New infrastructure would have cost
approximately $40 million to build
Novartis used AWS for HPC
computational chemistry

9. Amazon EC2 purchasing options
On-Demand Reserved Spot

10. EC2 On-Demand pricing
Short-term, spiky, and
unpredictable
Low cost and
flexible
Develop and test

11. EC2 Reserved pricing
Up-front payments to
reduce costs
Steady state Optional capacity
reservation
New

12. Change Instance
families, operating
system and tenancy
Savings Potential
Lease Terms
Change AZ, Instance
size (Linux),
networking type
Reserved Instance overview
Determining the best RI option for your needs
Standard
Yes
No
1 or 3 Years
Yes
Up to 75%
No Upfront
Partial Upfront
All Upfront
Payment
Convertible
Yes
Yes
3 Years Only
Yes
Up to 56%
No Upfront
Partial Upfront
All Upfront
Regional benefit?

13. Convertible Reserved Instances
With a Convertible RI you can:
Convert to a new instance family, e.g., R3 to C3 to T2 to M4
Convert to a new instance price, e.g., if AWS reduces the public rate of your
instances
Convert to a new operating system, e.g., Windows to Linux
Convert to a new instance size
Convert tenancy, e.g., from Dedicated Instances to default
Convert to a different payment option, e.g., No Upfront to Partial Upfront

14. EC2 Instance growth
2007 2008 201120102009 20162013 2014 2015
3
60+
Increasing customer choice through accelerating
instance innovation
Instances launched in 2016:
• Accelerated Computing: p2
• Memory Optimized: r4; x1.16xl
• I/O Optimized: i3
5
7
11
12
23
42
52

15. Change Instance
families, operating
system and tenancy
Savings Potential
Lease Terms
Change AZ, Instance
size (Linux),
networking type
Reserved Instance overview
Determining the best RI option for your needs
Standard
Yes
No
1 or 3 Years
Yes
Up to 75%
No Upfront
Partial Upfront
All Upfront
Payment
Convertible
Yes
Yes
3 Years Only
Yes
Up to 56%
No Upfront
Partial Upfront
All Upfront
Regional benefit?

16. Capacity
Reservation Benefit?
Automatic discount
across AZs?
Automatic discount
across instances
sizes?
Regional Benefit overview
Zonal Yes No
Sellable on the RI
Marketplace?
Regional
YesNo
No Yes Yes No

17. 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

18. Spot Instance details
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

19. 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!

20. Spot Advisor

21. Which EC2 consumption model is right for me?

22. Have a balanced meal!
Why choose just one business model?

23. Use a combination of all three!
1. Use Reserved Instances for
known/steady-state workloads
2. Set up multiple Auto Scaling
groups
3. Scale using Spot, On-Demand,
or both
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
/Spot
On-Demand
Spot
Reserved

24. Examples

25. Example: Three-tier web app

26. Tagging is essential!
• How do we explain the costs?
• How do we allocate the
charges to the right team?
• How do we save money?

27. Tagging is essential!

28. Stateless
Scale based on demand
Web tier
0
5
10
15
20
25
30
35
40
0 2 4 6 8 10 12 2 4 6 8 10
Web servers
Reserved Spot On-Demand
0
50
100
150
200
250
300
350
400
0 2 4 6 8 10 12 2 4 6 8 10
Web traffic

29. App tier
Stateful
Scale based on demand
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

30. Database tier
Highly stateful
Static at peak load
0
0.5
1
1.5
2
2.5
3
3.5
0 2 4 6 8 10 12 2 4 6 8 10
Database servers
Reserved On-Demand Spot
0
100
200
300
400
500
600
700
800
900
0 2 4 6 8 10 12 2 4 6 8 10
Database requests

31. 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
Have a balanced meal! Across the three
tiers, our meal consists of:
• Spot 13%
• On-Demand 11%
• Reserved 76%
Remember!
“No server is easier to manage than no
server” - Werner Vogels, CTO, Amazon.com

32. Ubisoft uses AWS to develop and launch
social games quickly
• Ubisoft is a Paris-based gaming company, and
creator of popular gaming titles, including Assassins
Creed, Far Cry, and Just Dance
• Moving games to social and mobile platforms
required capacity to scale fast; using a traditional
environment would be an extensive and costly
investment
• Using the AWS Cloud to optimize games at the
application, caching, and data layers, improving the
user experience
”
“ By using the AWS cloud we
were able to launch 10 social
games within 18 months.
Lenin Gali
Senior Director, Ubisoft

33. Example: Grid processing

34. Time
Typical server utilization rates are low due to need to deploy for peak needs…
The old way: Low utilization, high costs

35. Time
Higher grid utilization rates result in hidden costs: longer queue wait times
and delayed results
The old way: Managing utilization with grids

36. 0
20
40
60
80
100
120
140
160
3 year Reserved Instances
?
The old way: In the cloud!

37. Higher utilization can reduce IT spending…
0%
20%
40%
60%
80%
100%
Grid Utilization
The world as seen by central IT

38. -600%
-500%
-400%
-300%
-200%
-100%
0%
100%
0
200
400
600
800
1000
1200
1400
Jobs in the Queue
Grid Utilization
But higher utilization also creates IT constraints…
Every job in the
queue represents
business impact
But grid utilization
looks great!
The world as seen by the business

39. 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

40. ?
The new way: In the cloud!
0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
Optimizing for cost and business results
Spot
Spot block
On-Demand
3 year Reserved Instances

41. 0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
Going a step further with Spot blocks!
Spot
Spot block
On-Demand
3 year Reserved Instances
The new way: In the cloud!
?

42. “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
Accelerating transformation

43. EC2 purchasing options by industry

44. Web scale (e.g. , Adtech) company Enterprise SaaS company
Consumption model by industry

45. Onboarding enterprise Gaming company
Consumption model by industry

46. Technology companyScientific research
Consumption model by industry

47. Different purchasing options in a single company
Data science
New app development Test and development
Internal IT

48. Let’s recap
 Remember the pillars of optimization
 EC2 Right Sizing
 Increase elasticity (turn stuff off!)
 Measure, monitor, and improve
 Use tags to understand your services
 There are three core purchasing options –
have a balanced meal
 Architect your workloads with performance
and cost in mind

49. Summary
Freedom to build
unfettered
Freedom to get real
value from data
Freedom to say yes
AWS is more cost-effective in both short-term and long-term than on-premises
environments. By leveraging the EC2 consumptions models you gain the…

50. Thank you!