Date post: | 02-Jul-2015 |
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How to Reduce Your Spend
Joe Ziegler
Startup Business Development Manager APAC
@jiyosub
On AWS
APAC Webinar Series | AWS 201
How do the benefits of
AWS help to reduce my
spend?
Elastic On Demand
Pay as you go
Focus on
YOUR
business
Traditional IT
capacityCapacity
Time
Your IT needs
Elastic Capacity
On and Off Fast Growth
Variable Peaks Predictable Peaks
Elastic Capacity
On and Off Fast Growth
Predictable PeaksVariable Peaks
WASTE
CUSTOMER DISSATISFACTION
Elastic Capacity
When you turn off your cloud resources,
you actually stop paying for them
Elastic cloud capacity
Traditional IT capacity
Your IT needs
Time
Capacity
Elastic Capacity
Fast GrowthOn and Off
Predictable peaksVariable peaks
Elastic Capacity
Hardware, Software, Database, Network :
Procurement, Installation, Maintenance and Administration Costs
Economies of Scale
Pricing Models
Cost Aware Architecting
Economies of Scale
Pricing Models
Cost Aware Architecting
Powering the Most Popular Internet Businesses
Free steak campaign
Facebook page
Mars exploration ops
Consumer social app
Ticket pricing optimization
SAP & Sharepoint
Securities Trading Data Archiving
Gene sequencing
Marketing web site
Interactive TV apps
Financial markets analytics
R&D data analysis
Consumer social app
Big data analytics
Web site & media sharing
Disaster recovery
Media streaming
Web and mobile apps
Streaming webcasts
Facebook app
Consumer social app
Every Imaginable Use Case
Every Day…
AWS adds the equivalent server
capacity to power Amazon when it was
a global, $5.2B enterprise in 2003
2003
$5.2B retail business
7,800 employees
A whole lot of servers…
The AWS Price Reduction Philosophy
Ecosystem
Global Footprint
New Features
New ServicesInfrastructure
Innovation
More AWS Usage
More Infrastructure
Economies of Scale
Lower Infrastructure
Costs
Reduced Prices
More Customers
Economies of Scale
Pricing Models
Cost Aware Architecting
AWS Pricing Philosophy
• Pay as you go
– No minimum commitments or long-term contracts required
– Capex -> Opex
– Turn off when you don‟t need it
• Pay less per unit when you use more
– Tiered Pricing and Volume Discounts
• Pay even less when you reserve
– Reserved pricing
• Pay even less as AWS grows
– Efficiencies, optimizations and economies of scale result in passing the
savings back to you in the form of lower pricing
Pay less when you use more
On-Demand
Pay for compute
capacity by the
hour with no long-
term commitments
For spiky
workloads,
or to define needs
Cost Optimization using different purchase models
Reserved
Make a low, one-
time payment and
receive a significant
discount on the
hourly charge
For committed
utilization
Spot
Bid for unused
capacity, charged at a
Spot Price which
fluctuates based on
supply and demand
For time-insensitive or
transient workloads
Free Tier
Get Started on
AWS with free
usage & no
commitment
For POCs and
getting started
aws.amazon.com/free
Utilise the Free Tier
Time
Scale
Scenario Small team with initial idea for Mobile app
3 months to get to launch
Unknown customer/problem/solution
No cash….
• Internal testing with your team
• 2 Tier Web - Database Servers
• Use t1.micro Instances
Dev / Test Environment
Time
Scale
Average Spend
$0p/m
• Release to small group of ‘core testers’
• 2 Tier Web & Database Servers
• 2 x t1.micro Instances
Alpha Release
Time
Scale
Average Spend
$15p/m
• First public release – limited audience
• Master / Slave DB setup
• m1.small Instances
• Auto-Scaling Instances (2 Instance minimum)
Beta Release / MVP
Time
Scale
Average Spend
$235p/m
Getting to MVP for $250
Time
Scale
Total Spend to MVP
$250$235$15$0
• 3 months dev/test/release
• Serving Beta customers
• Ready for full production
and scale
Reserved Instance Pricing
Make a low, one-time payment and receive a
significant discount on the hourly charge
For committed utilization
•Light Utilization RI
•Medium Utilization RI
•High Utilization RI
•1-year
•3-year
2 Terms3 Versions
Reserved Instance Pricing
Utilization RI option Savings over On-Demand
<10% On-Demand
10% - 40% Light Utilization RI Up to 56%
40% - 75% Medium Utilization RI Up to 66%
>75% Heavy Utilization RI Up to 71%
S3 Storage Volume
EC2 Instance Hours
February 2013
48.7 million users globally
Raised $200M (Total = $338M)
$2.5B valuation
• Most traffic happens in the afternoons and evenings, so they reduce the number of
instances at night by 40%.
• At peak traffic $52 an hour is spent on EC2 and at night, during off peak, the spend is as
little as $15 an hour. Saving per hour = 71%
Save more money by using Spot Instances
Up to 85% savings over On Demand pricing
Spot market for under-utilized capacity
Requested Bid Price and Pay as you go
Spot Price < On-Demand Price
Use Case Types of Applications
Batch Processing Generic background processing (scale out computing)
Hadoop Hadoop/MapReduce processing type jobs (e.g. Search, Big Data, etc.)
Scientific Computing Scientific trials/simulations/analysis in chemistry, physics, and biology
Video and Image Processing/Rendering
Transform videos into specific formats
Testing Provide testing of software, web sites, etc
Web/Data Crawling Analyzing data and processing it
Financial Hedgefund analytics, energy trading, etc
HPC Utilize HPC servers to do embarrassingly parallel jobs
Cheap Compute Backend servers for Facebook games
Use Cases for Spot Pricing
Optimizing Video Transcoding Workloads
for a FREEMIUM model
Free OfferingOptimize for reducing cost
Acceptable Delay Limits
Implementation
– Leverage spot pricing
– Maximum Bid Price
– < On-demand Rate
– Use on-demand Instances, if delay
Get strongly reduced price for your workload
Premium OfferingOptimized for Faster response
No Delays
Implementation
– Invest in Reserved Instances
– Use on-demand for Elasticity
Get Instant Capacity for higher price
Economies of Scale
Pricing Models
Cost Aware Architecting
“Give me 4 fault tolerant algorithms and I can pick
the best one almost with my eyes closed.
If you then ask me which one is best for the
business, in terms of dollar costs, I would be
clueless...”
Werner Vogels, CTO, Amazon
Cost optimization through „Cost Aware Architecting‟
…by leveraging:Reduce Cost of…
Compute1. S3 & CloudFront for Caching & Offloading
Storage 5. Storing derivative objects in S3 „Reduced Redundancy‟
Database 6. Read Replicas and/or ElastiCache
Test & Dev 7. Rapid proto-typing & Lean Dev/Test
2. Auto-Scaling done Right
3. Leverage Managed Services
4. Sizing your Application for AWS
1. S3 & CloudFront for Caching & Offloading
• Reduce your compute demand and costs
• Improve end-user experience
• Increase reliability and durability
Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
• Elastic Load Balancing and (event-driven) Auto Scaling
• Notification of pending news flash (with audible alarm)
• On-demand ramp up of capacity (6 mins.)
• Subscriber alert push delivered
• Mass response traffic handled (followed by ramp down)
Cost Aware Architecting to Reduce costs of EC2
BuUuk for Singapore Press Holding (SPH)
2. Auto-Scaling done Right with Real Time reaction response
Cost Aware Architecting to Reduce costs of EC2
Straits TimesBuuuk
2. Auto-Scaling done Right with Real Time reaction response
Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
Cost Aware Architecting to Reduce costs of EC2
3. Leverage Managed Services
Cost Aware Architecting to Reduce costs of EC2
Rabbit MQ, MSMQ
Cron
Running a mail server
Running a NoSQL cluster
Running MySQL on EC2
Memcached
Encoding Server
VS
Simple Queuing Service
Simple Workflow Service
Simple Email Service
Dynamo DB
Relational Database Service
ElastiCache
Elastic Transcoder
4. Sizing your Application for AWS
Cost Aware Architecting to Reduce costs of EC2
256
128
64
32
16
8
4
2
1
1 2 4 8 16 32 64 128 256
High I/O 4XL 60.5 GB35 EC2 Compute Units16 virtual cores2*1024 GB SSD-based local instance storage
EC2 Compute Units
Me
mo
ry (
GB
)
Small 1.7 GB, 1 EC2 Compute Unit1 virtual core
Micro 613 MB Up to 2 ECUs (for short bursts)
Large 7.5 GB4 EC2 Compute Units 2 virtual cores$0.32/0.46
Hi-Mem XL 17.1 GB6.5 EC2 Compute Units 2 virtual cores
Hi-Mem 2XL 34.2 GB13 EC2 Compute Units4 virtual cores
Hi-Mem 4XL 68.4 GB26 EC2 Compute Units 8 virtual cores
High-CPU Med 1.7 GB 5 EC2 Compute Units 2 virtual cores
High-CPU XL 7 GB 20 EC2 Compute Units8 virtual cores
Medium 3.7 GB, 2 EC2 Compute Units1 virtual core
M3 XL 15 GB 13 EC2 Compute Units 4 virtual coresEBS storage only
M3 2XL 30 GB 26 EC2 Compute Units 8 virtual coresEBS storage only
Extra Large 15 GB 8 EC2 Compute Units4 virtual cores
10 GB Inter-Instance
Network
Cluster GPU 4XL 22 GB 33.5 EC2 Compute Units, 2 x NVIDIA Tesla “Fermi” M2050 GPUs
Cluster Compute 4XL 23 GB 33.5 EC2 Compute Units
Cluster Compute 8XL 60.5 GB 88 EC2 Compute Units
High Storage 8XL 117 GB35 EC2 Compute Units, 24 * 2 TB ephemeral drives10 GB Ethernet
Hi-Mem Cluster Compute 8XL 244 GB 88 EC2 Compute Units16 virtual cores240 GB SSD
5. Storing derivative objects in S3 „Reduced Redundancy‟
• Original vs. derived assets : 33% savings
• Single reference and consistency
• Control, accurate logs and tracking
Cost Aware Architecting to Reduce costs of S3
Reduced Redundancy Storage
„RRS‟
6. Read Replicas and/or ElastiCache („Database Smarts‟)
• Scale out and share work
• Optimal performance, minimize load
• Enhance reliability, ensure data safety
• Cost reduction
Cost Aware Architecting to Reduce costs of DB
7. Rapid proto-typing & Lean Dev/Test
• Inexpensive idea validation
• Seamless switch over and versioning
• Rapid dev / test agility
Cost Aware Architecting to Reduce costs of Test/Dev
Bringing this all Together
Enterprise software provider in APAC
Focused on SaaS for storage, security, collaboration, etc.
Backed by leading VC’s in the region
Strong growth – winning customers globally
Focused on profitability & reducing unit costs
Worked closely with the AWS team to optimize its architecture
Margin
Growth
-10%
price drop
in S3
-20%
RI purchase
-22%
Migration
Cassandra
to Dynamo
-18%
Price drop in
S3 of 25%
54%
reduction in
unit costs
“Based on a True Story”
New CustomersAmazon EC2
Amazon RDS
Amazon ELB
Amazon S3
Amazon EBS
For All CustomersAmazon SQS/SNS
Amazon DynamoDB
Amazon SES
Amazon SWF
And more…
AWS Elastic Beanstalk
AWS CloudFormation
AWS IAM
Auto Scaling
Consolidated Billing
No Charge for
Inbound Data Transfer
Data Transfer between
Instances within an
Availability Zone
Free Usage Tier
Did you know?
Free Services Data Transfer
Trusted Advisor
Survey
Please fill out the survey at the end for
$25 USD in AWS Credits
Thank You
Joe Ziegler
Startup Business Development Manager
APAC
@jiyosub
APAC Webinar Series | AWS 201