AWS Cost Optimisation Solutions

© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
November 2017
Cost Optimisation Solutions

Today’s Speaker
Ekkarat Klinbubpa
Partner Success Manager, AWS,
APAC
Helps customers optimise spend &
realise business value

© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Today’s Agenda

Today’s Agenda
Cost optimisation levers
and tools
Commercial Management
?Next steps,
Survey, and Q&A
Finance team
considerations
How AWS helps you
realize value and save cost

How AWS helps you
realise value and save cost

What is Cloud Computing? It’s Similar to a Power Grid
Labor & Time Intensive
We Need To Manage
Responsible For Repairs
Build Your Own Power Plant

What is Cloud Computing? It’s Similar to a Power Grid
Labor & Time Intensive
We Need To Manage
Responsible For Repairs
Leverage Established Resources
Centrally Managed by 3rd Party
Upgrades Provided
Build Your Own Power Plant Plug Into A Power Grid

Now, in the Context of Today’s IT Investments
Large, Upfront Capital Investment
We’re Responsible For Upgrades
Slow To Get New Capabilities
Build Your Own Datacenter

Large, Upfront Capital Investment
We’re Responsible For Upgrades
Slow To Get New Capabilities
Pay For What You Use
Automatic Upgrades Of Functionality
Access To Feature-Rich Platform
Plug Into The Cloud
Now, in the Context of Today’s IT Investments
Build Your Own Datacenter

AWS allows you to fit cost to today’s demand
“you can hug your workloads, instead of your servers”

AWS lowers prices over time
… 63 Price Reductions

AWS shares how to save cost on AWS
AWS re:Invent 2016: Cost Optimizing Your Architecture:
Practical Design Steps For Savings (ARC310)

You can significantly reduce your Total Cost of Ownership
on AWS compared to on-premise infrastructure
“We’ve realized a 52 percent reduction in TCO …
Ultimately these savings are a byproduct of doing the right thing.”
Ben Cabanas, CTO, GE Transportation
“Three years on, we’ve saved over $100 million in
avoided capital and are about 65% in the cloud.”
Dominic Shine, CIO News Corp
Leveraging the AWS platform, we’ve been able to
seamlessly scale our infrastructure, better serve our
customers across the globe, and reduce our fixed costs by
75% and operational costs by 83%.
Valentino Volonghi, CIO AdRoll

COST
SAVINGS
Cost savings are only the tip of the iceberg …
BUSINESS AGILITY
OPERATIONAL
RESILIENCE
STAFF & RESOURCE
EFFICIENCY
https://aws.amazon.com/solutions/case-studies/
GLOBAL
REACH
NEW REVENUE
STREAMS

AWS provides a Total Cost of Ownership calculator to
support your business case for migration
https://aws.amazon.com/blogs/aws/the-new-aws-tco-calculator/

Cost optimisation levers
and tools

Optimisation levers drive down costs over time
Owned
AWS Serverless
Application
AWS highly
optimized
~90%
Less Cost
Real Estate
Facilities
Networking
SAN
Servers
Power
Storage
Hypervisor
Operating System
Application
EBS (Block Storage)
S3 (Object Storage)
EC2 (Servers)
Application
AWS + basic
optimization
~20-50%
Less Cost

The 4 basic pillars of Cost Optimisation
Right Sizing Your
Instances
Pick the Right
Pricing Model
Increase
Elasticity
Match Usage to
Storage Class
“You can use more efficiently, use less, or pay less”

Pillar 1: Right Sizing
Right Sizing
• Selecting the cheapest instance while meeting
performance needs
• Look at CPU, RAM, storage, and network
utilization to identify instances that could be
downsized

87%
Saving
Right Sizing example
m4.4xlarge
$1.72 per hr
m4.large
$0.215 per hr
2. Check (CPU,
RAM, network, disc)
1. Migrate/provision
& Run
3. Right Size
5. Save!4. Review Performance

Right Sizing tools
Cost Optimisation:
EC2 Right Sizing
https://aws.amazon.com/answers/account-
management/cost-optimisation-ec2-right-
sizing/
AWS trusted advisor
Comes with Business and Enterprise
support. Points out idle resources.

Pillar 2: Increase Elasticity
“Hug your workloads, not your servers”
AWS allows you to fit cost to today’s demand.

Reduce dev/test by 70% via scheduling
Fun fact:
RDS can be
turned off too

Elasticity Tools
EC2 Instance Scheduler
Semi managed option
https://aws.amazon.com/answers/infrastructur
e-management/ec2-scheduler/
Lambda Start-Stop guide
DIY option
https://aws.amazon.com/premiumsupport/kno
wledge-center/start-stop-lambda-cloudwatch/
GorillaStack
Fully managed 3rd party solution
https://aws.amazon.com/documentation/
autoscaling/
Guide to autoscaling
Netflix Janitor Monkey
Open source, cleans environment
removing unused resources
https://medium.com/netflix-techblog/janitor-monkey-
keeping-the-cloud-tidy-and-clean-d517ad74d648

Pillar 3:
Leveraging the Right
Pricing Model
Reserved Instances
EC2 Spot
On-Demand

What are Reserved Instances (RIs)?
RIs are like discount coupon booklets
• Each RI gives one coupon per hour per instance being reserved over
the term of the RI (e.g. a 1 year RI provides 24*365 coupons)
• The coupon provides a discount in exchange for commitment
• Each individual coupon expires at the end of each hour
• RIs are a financial construct/layer on top of your AWS infrastructure
RI coupon

RI
coverage
Total use
Key
Reserved Instances for one financial services customer
resulted in 39% decrease in unit cost
Reserved Instance
purchase

RIs are best used for Always-On instances
(can still be used to save for non-always on)
Commitment level
1 year (approx. payback 7-9 months)
3 year (approx. payback 10-18 months)
AWS services offering RIs
Amazon EC2 & EC2 Hosts
Amazon RDS
Amazon Redshift
Amazon ElastiCache
Amazon DynamoDB*
Amazon CloudFront*
*Discount for commitment, but not a RI

EC2 RI matching properties
• Instance type: m4.xlarge
• Operating System: Linux/UNIX, Windows, Windows with
SQL Server Standard, etc.
• Region: ap-southeast-2 (Sydney)
o or AZ: ap-southeast-2a
• Tenancy: Shared, dedicated

Understanding the different EC2 RI types
1 year 3 years
Standard Regional
(with Linux/Unix Size Flex)
Regional
AZ-Specific
(with capacity reservation)
AZ-Specific
Convertible Regional (new) Regional
AZ-Specific (new) AZ-Specific
Note: can easily switch between Regional and AZ-Specific at no cost
Shaded items affect pricing

Understanding Convertible Reserved Instances
With a Convertible Reserved Instance, you can modify
your existing reservation across:
Instance families
Instance sizes
Operating Systems
Tenancy

Understanding Convertible Reserved Instances
You are committing to:
3 years (not refreshed on conversion)
Region
EC2 on AWS
Spend (convert to equal or greater $)

Understanding Instance Size Flexibility
• Effective March 1, your existing Regional RIs are even
more flexible!
• All Regional Linux/UNIX RIs with shared tenancy now
apply to all sizes of instances within an instance family
and AWS region.
• E.g. 1 m4.xlarge RI can apply to:
2 m4.large instances or
½ a m4.2xlarge instance

RIs have priority to apply to instances in the same
account as the RI
http://docs.aws.amazon.com/awsaccountbilling/latest/
aboutv2/consolidated-billing.html
RI can live here and this
account will get priority
to use it first
RIs can also live here and this account
will get priority to use the RI.
Be sure to have RI console access to
modify RIs if needed & billing console
access to check RI utilisation

Use Cost Explorer to track your RI utilization
(higher utilisation = greater savings realization)

Use Cost Explorer for EC2 RI recommendations

Pillar 4:
Leveraging the Right
Storage Class
Elastic Block Store
Simple Storage Service

Use appropriately sized Elastic Block Store (EBS)
https://aws.amazon.com/ebs/details/
Provisioned IOPS
SDD (io1)
General Purpose
SDD (gp2)
Throughput
Optimized HDD (st1)
Cold HDD
(sc1)
Default
Even cheaperCheaper

Storage Classes on Simple Storage Service (S3)
Active data Archive dataInfrequently accessed data
Standard (default)
Hot
Standard - Infrequent Access
Warm
Amazon Glacier
Cold

S3 Analytics provides additional functionality
over standard S3 lifecycle policies
http://bit.ly/s3analytics
Lifecycle policies also
clean up incomplete
multi-part uploads to S3

Beyond the 4 pillars, there are many more ways to save…
Containerization
Consolidated
billing
Automation via AWS
CloudFormation
Release unused
Elastic IPs
Serverless & AWS
Lambda
ELB to Application Load
Balancer (typically
reduces cost)
Architect with
AWS CloudFront
Migration to open source
platforms & databases

Cost Explorer

Trusted Advisor

Commercial Management
(strategic perspective)

Mechanisms for
Optimisation

Mechanisms for Optimisation for new starters
Define, agree, and enforce
cost allocation tagging
Define metrics, set
targets, and review
Using out-of-the-box
tools

Define, agree, and enforce
cost allocation tagging

Define and agree mandatory (cost) tags with
stakeholders from the Business
Tagging -> Allocation -> Showback -> Chargeback -> Ownership ->
Drive responsibility and efficient behaviour

Using out-of-the-box tools

3rd party tools can help you accelerate your automation and
reporting maturity
See: https://aws.amazon.com/aws-cost-management/ for AWS native tools

Finance team considerations

Potential solutions used by commercially mature
customers
Traditional IT Assumption Potential cloud solution
Costs are largely static and
predictable once they reach the
BAU budget
101: Ask for $ forecast from engineers
201: Remove budgets for non-static cost and
measure efficiency via $ per revenue, $ per dev.

customers
BAU budget
Approvals for projects and
associated cost occur upfront
101: Put in place approvals for any spend
201: Place approval gate at transition from project
spend to BAU spend based on whether business
value drivers were met

customers
BAU budget
Approvals for projects and
associated cost occur upfront
101: Put in place approvals for any spend
201: Place approval gate at transition from project
spend to BAU spend based on whether business
value drivers were met
IT is treated as a cost center 101: Tagging & Enforcing tagging
201: Running all reports off the same cost-allocated
data and assigning ownership through chargeback

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AWS Cost Optimisation Solutions

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